July 18, 2025 Breaking News, Latest News, and Videos

“Shadow Inventory” and Future Home Prices:

MICHAEL EDLEN, REAL ESTATE CONSULTANT

A prospective homebuyer asked whether I would agree that it made sense for him to wait longer before purchasing a Santa Monica home. His question was based on a recent report from Core Logic, a mortgage research firm. They had stated that “a supply of 2.1 million homes poised for foreclosure or delinquency potentially looms over the nation’s housing market… this ‘shadow inventory’ is at an 8-month supply as of September, and consists of residential real estate that is in foreclosure, has a loan 90 days past due or has been taken back by a lender and not yet listed for sale.” They noted that the total supply of homes in the country was up to a 23-month level, including the unlisted “shadow inventory.”

The question is how this information relates to Santa Monica homes in particular. Of course each Santa Monica market segment is different, and home value changes are very “neighborhoody.”

A review of public records shows that only 134 Santa Monica homes are currently bank owned and potential near-future foreclosures, which represents only 1.6 percent of all the homes here. Moreover, only 7 percent of the homes sold in the last year were under financial distress as identified in the multiple listing service. This is in contrast to some areas in Southern California where between 20 to 50 percent of total home sales are in this financially distressed category. The Santa Monica condominium market percentage of “financially distressed” sales is half that of homes, with only 3.5 percent of the 428 total sales over the past year in such categories.

With approximately 90 homes available for sale and a rate of 21 homes per month selling on average, Santa Monica has less than a 5-month inventory of supply. There are 40 homes that are bank or investor owned. Even if these were all included in the overall supply, it would equate to less than an 8-month inventory, which is significantly less than the 23-month inventory of homes the Core Logic study mentioned. Moreover, even if all of the homes set for auction in Santa Monica were included, the potential current inventory would still be less than a 9-month supply.

These statistics could indicate some justification to delay buying. However, some areas have already experienced price increases, while most of Santa Monica has been stable for nearly a year, so there may be little to gain from such waiting. Also, delaying to make a purchase decision may well result in a home seeker missing out on what might be the most ideal home for their family needs.

Interest rates are at 50-year lows. It is highly likely that within the next year those rates will be higher, offsetting any small additional price decreases that may occur.

Of course none of us have a reliable crystal ball to give clear direction to such decisions. However, unless a prospective buyer intends on selling the new home in only a few years, odds are that they will look back with great pleasure several years from now at their decision to purchase sooner rather than later.

We invite any current prospective homebuyer to contact our office for evaluations of any particular neighborhood they are considering purchasing in. We will be glad to perform an analysis to help you make a purchase timing decision.

Michael and his team have been effectively serving Santa Monica buyers and sellers with their real estate goals for 25 years. They may be reached at 310.230.7373 or Michael@michaeledlen.com.

in News
<>Related Posts

Man Arrested in Brentwood for Impersonating Firefighter During Palisades Fire

July 18, 2025

July 18, 2025

The suspect faces at least 28 criminal counts—including 23 felonies—spanning incidents from 2023 to May 2025 Federal and local law...

West Coast Premiere of ‘The Opposite of Love’ Opens at Hudson Backstage Theatre

July 18, 2025

July 18, 2025

Produced by Neil Gooding Productions, behind shows like Back to the Future: The Musical, the play runs Thursdays through Saturdays at...

Study Highlights Economic Impact of Cap-and-Trade Extension in Los Angeles

July 18, 2025

July 18, 2025

Governor Gavin Newsom and legislative leaders are pushing to reauthorize the program this year, citing its role in generating 287,000...

Film Review: Superman

July 17, 2025

July 17, 2025

“This movie is packed with storyline, Superman lore, meaningful objects, and action.” writes Kathryn Whitney Boole Rated PG-13129 MinutesReleased July...

Multiple Drug Arrests Reported in Palisades Park in Recent Weeks

July 17, 2025

July 17, 2025

SMPD Reported Several of the Arrests Between June 29 and July 5 The Santa Monica Police Department reported several drug-related...

(Video) Did You Know Emma Chamberlain’s Coffee Shop is in Century City?

July 17, 2025

July 17, 2025

The outpost is a first for the popular influencer Did You Know Emma Chamberlain’s Coffee Shop is in Century City?...

Mayor Bass Hails National Guard Withdrawal as Victory for Unity

July 17, 2025

July 17, 2025

The Pentagon’s decision to reduce the troop presence follows weeks of legal challenges and public demonstrations Mayor Karen Bass celebrated...

DUI Checkpoints to be Conducted Across LA This Weekend

July 16, 2025

July 16, 2025

The LAPD selects checkpoint sites based on data indicating high incidents of impaired driving-related crashes and arrests The Los Angeles...

SMPD to Conduct Bicycle and Pedestrian Safety Operation on Friday

July 16, 2025

July 16, 2025

The focus will be on speeding, illegal turns, failing to yield or provide right of way to cyclists or walkers,...

Dodgers to Host Back to School Bash for Fire-Affected Families

July 16, 2025

July 16, 2025

The free event will offer free groceries, school supplies, outfits, haircuts, medical screenings, and carnival rides The Los Angeles Dodgers...

LA Sees Second Straight Year of Homelessness Decline, Leaders Celebrate Progress

July 16, 2025

July 16, 2025

The survey, designed by the University of Southern California, reported a 17.5% drop—the largest two-year decrease on record The Los...

LAPD Seeks Missing 63-Year-Old Man Known to Frequent Playa Vista

July 15, 2025

July 15, 2025

His family last heard from him via a group text on June 22 The Los Angeles Police Department’s Missing Persons...

Santa Monica Offers City-Owned Properties for Affordable Housing Development

July 15, 2025

July 15, 2025

The move aims to address the city’s Regional Housing Need Assessment of 8,895 units, with a goal of producing at...

California Hits Two-Thirds Clean Energy Milestone

July 15, 2025

July 15, 2025

This year, clean energy has powered the state for an average of seven hours daily, with over 90% of days...

Venice Beach to Host First Medal at 2028 Olympics

July 15, 2025

July 15, 2025

Venice Beach, known for its vibrant boardwalk, will kick off the 844 ticketed events, hosting the triathlon along its coastline...