Manhattan Beach home price erosion

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Three months ago, we looked at the downturn’s late arrival in the Westside. Turns out, Santa Monica, Beverly Hills and other prestigious areas weren’t the exceptions to the real estate crash many had argued they would be.

Another coastal enclave, Manhattan Beach, has also trailed in the down cycle, and some there had also claimed its beach location and good schools would make it immune from price declines. Everyone in the world wants to live there, goes the claim.

The Manhattan Beach Confidential blog cites a couple of examples that market forces do in fact apply there. Two adjacent houses in a desirable neighborhood, designed by one of the area’s most celebrated architects, sold recently for far less than their sellers had sought. The first house sold in October for $1.82 million, basically the same price it fetched in its previous sale in March 2005. Its owner had first listed the place for $2.7 million.

The second, larger house, sold this week for $2.6 million -- nearly $400,000 below its previous sale price in 2006 of $2.995 million. Its owner had first listed it at $3.449 million, the blog reports.

Aarchan Joshi, an ophthalmologist who keeps his eyes fixed on Manhattan Beach real estate and contributes to the MB Confidential blog, e-mailed me Friday morning with some of his own data analysis. Looking at 21 years of Manhattan Beach sales data, Joshi calculated that the average annual sales total for the city is 665 homes. In 2008, he notes, 325 homes were sold there, according to his crunching of MDA DataQuick numbers.

Like other high-priced areas, it appears Manhattan Beach sellers are holding out, and buyers are resisting high list prices. That’s stalled sales. Now, when they do occur, we may see the kinds of price drops Joshi and others say are overdue and inevitable.

-- Peter Y. Hong