The Santa Monica real estate market is showing signs of a fairly stable, seller’s market. For the first time since the real estate price peak in 2005 and 2006 when the median high reached as high as $1,040,000, Santa Monica in 2011 saw a 7% increase in sales prices in median single family home sales at $1,549,000 and 4% growth for condos at $765,000.
Positive indicators for sellers were that while buyers were continuing to compete (sometimes in multiple bidding situations) for what is considered a healthy but not plentiful amount of inventory for sale, the number of days on market shortened to 62 days, and the overall sales values were up…. all positives for a seller
Another indicator of how the market improved for home sellers is the 96% listing to sales price ratio achieved by sellers. In a strong seller’s market the ratio hovers near 100% and in a buyer’s market the percentage can be 90% or below. The strong listing to sales price ratio indicates that Sellers are listing their homes at more realistic prices. Sometimes in the case of bank owned (REO’s) or short sales, the list prices are extremely close to actual fair market value or even somewhat under priced. The realistic prices cause an increase in the number of buyers for properties and in some cases the competition among buyers will push the prices higher than the list price.
Buyers are still getting tremendous value with prices 20-25% off their peaks and interest rates staying very low.
As improved as the market has been, there are still some interesting revelations. If the market is broken down by nine price ranges, all except two of them show a decrease in the number of closed home sales, including the most active price range of $500,000 to $1,000,000. In this price range, 2011 had a 16% decrease in home sales. The two exceptions where price ranges finished higher in sales are $500,000 and under (24% increase) and $1,000,000 to $1,500,000 (22% increase), thus showing where the sweet spots were in the 2011 market. Because of these price range differentiations, some zip codes like 90402 are doing better than 90403 and 90405, which have experienced light declines.
The information provided is intended to show trends of prices and units sold in the Santa Monica. There are pockets within Santa Monica that may not be reflective of the averages in the data provided but the trends can still be applicable.
Here is a recap of some of the trends:
- Days on market are getting shorter meaning homes are selling quicker once they come on the market.
- Condos and homes are both in demand, sometimes resulting in multiple buyers competing for the same property.
- The upper-end market was more active ($4,000,000 and up range) with a high sale of $11,650,000 versus a high sale of $7,700,000 in 2010.
If inventory (listings) does not increase drastically and rather, continues to be around 600, we can expect the price to push up, since demand is exceeding the supply of homes.
*Stats compiled here are gathered from all transfers taken place on public records but not including homes sold with hidden sales prices. The charts above are intended to show trends in home sales units and the median sales peak for each year.