I would define it as the difference between whether or not the property merits putting more money into it, or if its highest and best use is as new construction? Assuming one could afford to build new.
The dividing line in MB is unlike many communities as the land is so valuable. Many properties that would be fixed up elsewhere are torn down here, as is evidenced by the many new homes built in all areas of the city in the past 10 years and the ongoing (though somewhat slowing) rash of residential construction.
For detailed info on all things real estate related in MB, as well as a guide to life in the city, please check out ManhattanBeachRE.com and good luck!

Good Question..Finances I would think. Property near the beach is not easy to come by and some buyer's want things they cannot have in the property they have purchased. It's not uncommon for buyers to start all over and build the house the way they want it!

A tear down is simply a house that's too far gone on a lot that's much more valuable than the house. A fixer can be any house that when fixed up will add enough value to be at or above market price.

That's a great question. Truthfully there may not be any difference between them in Manhattan Beach or nearby Beach Cities. As the area is completely built out most new homes can only be built on properties where an existing home must be torn down. In these situations it is the land that has all the value not the structure. Often the home that is torn down is small and may be in good condition needing only some minor repairs. However the land is so valuable that builders often out bid first time buyers who are looking for a fixer.
Sellers like selling to builders as they can sell the properties "as is" and make no repairs or warranties about condition.