October 29, 2020 Breaking News, Latest News, and Videos

More Positive Signs In Santa Monica and The Palisades Real Estate Market:

It is generally acknowledged that the average Santa Monica and Palisades home sale prices are off from their highs two years ago by 24-30%. People would like to know how the current market compares with the last several years.

To answer this simply may not be simple at all. However, there are several approaches that can offer a reasonable set of answers. First, the median sale price point as of June 2009 ($1,950,000) is at approximately the same level as it was in the fourth quarter of 2005. Secondly, and perhaps a more accurate gauge of market value, is that the average price-per-square-foot is back to where it was in the first half of 2005 ($741 per foot). These calculations have been derived directly from the MLS record of annual Santa Monica and Palisades sales.

The current statistical snapshot of the local real estate market shows that as compared with the same time period in 2008, sales so far this year are 26% lower and inventory is 24% higher. It may be observed that these numbers are improvements from just a few months ago, and perhaps indicate that a change for the better is in process.

Another way of looking at where the market is as compared to previous years may be ascertained by a careful comparison of the same homes that have sold in the last several months, and that had also sold in the previous five years. By comparing these sets of figures, it is possible to approximate on a more “apples-for-apples” basis what individual home price changes may have occurred. There were nine such repeat sales in the Palisades over the past several years, and by calculating the changes over time on an annual basis, it indicates that current price levels are about where they were in the second quarter of 2004.

The following may provide a glimpse as to where the market is trending soon. The level of home inventory is currently 16 months, based on the actual sales that have occurred so far this year. However, in looking at the escrows currently in process, a distinct change is quite apparent. As of June 15 there were 76 homes in escrow in Santa Monica and the Palisades, as compared with as few as ten in the first quarter of this year. Twenty-seven escrows opened so far in June, which is a very significant increase for our community. If only 75% of these close escrow, it would indicate that the inventory level may be rapidly adjusting closer to a seven or eight month level by August.

Please note that all of the above is in a context wherein the consumer confidence index has just had its third consecutive month of increase. The index level of 54 is now the highest it has been since September. This is compared with the widespread expectation that the index would be 43-45 this month.

For the past 23 years Michael Edlen has provided real estate counseling services to prospective buyers and sellers. More tips and information are available on MichaelEdlen.com. He can be reached at 310.230.7373 or [email protected]

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