As we enter the third month of 2011, it may be of interest to see where the overall Santa Monica real estate market appears to be, and how it compares in some respects to the same period in 2010. As of March 6 there were 84 homes for sale in Santa Monica, ranging from $650,000 on Warwick Avenue, to over $17 million (22,000 sq. ft. home on more than an acre, which has been on the market for over one year) on San Vicente Blvd. So far this year there have been 38 Santa Monica sales (including single-family residences only), ranging from $532,000 on Ozone to over $5.4 million on Palisades Avenue. This compares with 27 sales in the same period of 2010, ranging from $650,000 to $2.8 million.
The number of sales so far this year has been 40 percent greater than the sales at this time in 2010. The median price of those homes sold was lower by approximately 6 percent than the first two months of 2010. Similarly, the average price per square foot for this year’s sales is about 5 percent lower than last year.
Looking forward, it is interesting to observe that there are currently 84 homes for sale. With 38 homes having sold in the last two months, this equates to an approximate four-month level of inventory. With 41 homes currently in escrow, it substantiates that the monthly rate of sales is most likely to continue to remain stable. Real estate economists and brokers generally agree that when the level of inventory equals or is greater than seven months, it tends to strongly favor buyers. Conversely, when the level of inventory is below six months, the market is characteristically one that favors sellers. Thus, Santa Monica is a marketplace which currently clearly continues to favor sellers.
The combination of these observations makes it unclear whether Santa Monica is currently experiencing a market continuing to adjust to lower prices, or is now in the process of stabilizing at an already-adjusted lower level. Although, obviously, only time will tell, one thing is clear – this is not a market environment that favors buyers at this time.
Michael Edlen has been in the top 1 percent of all Coldwell Banker agents nationwide for nearly 20 years and has successfully completed more than 950 transactions. He provides a broad range of real estate counseling and marketing services. He can be reached at 310-230-7373 or at Michael@MichaelEdlen.com. More tips and information are available on MichaelEdlen.com.