Looking Back and Forward on Santa Monica's Housing Market
Posted Jan. 8, 2011, 1:11 am
Michael Edlen / Real Estate Consultant
As we begin the year 2011, the number of homes available for sale in Santa Monica is relatively low. There are 67 homes on the market, ranging from $679,000 on Centinela to nearly $18 million on San Vicente. That estate is over 22,000 square feet under construction on a double lot of 58,000 square feet overlooking the Riviera golf course.
The average list price is more than $2.3 million, due to several high-price properties. The median price is now $1,650,000. That’s the mid-point of all the current prices for homes here today.
In 2010, 238 homes sold in Santa Monica, an average of 20 per month, as compared with 190 in 2009, averaging 16 per month. Driven by 25 percent higher sales volume, Santa Monica home values remained nearly unchanged from 2009, in contrast with most of the country and even the greater Los Angeles area. Average local house prices per square foot were also unchanged from the last year, showing a clear indication of a market that may have reached at least a stable base now.
Another indication of stabilizing in Santa Monica is the average time on market has decreased from 71 to 63 days. Moreover, the average sales prices are now 95 percent of average list prices, which compares with 94 percent in 2009.
Taking a look ahead, it is reasonable to expect either a stable or slightly increased market as far as prices are concerned. This is because the overall inventory level is so low relative to the current rate of sales in Santa Monica. It is generally understood that when the number of homes available for sale in any particular area equals six or seven months of inventory at the current rate of sales, it is a market fairly balanced between sellers and buyers. When there is greater than seven months supply of homes available, it clearly favors buyers, and below six months is generally considered to be a “seller’s market.” As of Jan. 3, there is only 3.5 months supply available, which is a strong indicator favoring sellers at least for several months.
One reason for inventory being so low is that some owners have taken their homes off of the market for the holidays, and others have decided to lease rather than sell due to the current price levels being below their expectations or desires. Another factor is the “shadow inventory” of properties owned with financial pressures that may become active listings fairly soon, either as “short sales” by owners or as homes foreclosed by banks.
Of course each neighborhood has its own price dynamics, and the condo market does not necessarily reflect the same indicators as does the house market. Also, different price ranges will have varying degrees of market balance between sellers and buyers.
Therefore owners considering selling property in the next year or so would do well to talk with an experienced real estate agent to assess where their particular property might fit into this picture before deciding on timing and price positioning.
With loan interest rates still relatively low, lenders having somewhat relaxed the difficulties for getting financing, and a slightly increased level of consumer confidence, this is an environment that may encourage buyers to benefit from the more affordable prices. Santa Monica continues to be very attractive to people from all over the country and that factor will always remain true.
Michael Edlen, a Realtor with Coldwell Banker, has sold more than 900 properties in 25 years. Information on his marketing and escrow management systems is available at www.MichaelEdlen.com, and he may be reached at 310.230.7373 or Michael@MichaelEdlen.com.