To all my loyal and faithful Dirt readers; Happy New Year!
Did you miss me? I took a few weeks off from writing in the last part of 2019. Ok, maybe it was more than a few weeks. A vocal few of you have successfully shamed into resuming my semi-regular Santa Monica Dirt ramblings so here we go….
First off, if one more person asks me “What is the market going do this year?” Well, I am going to… (what’s your best guess as to what I want to do with that question?) If you guessed, “answer the question”, you are correct. The answer: More of the same market we had in 2019. Interest rates remain at all-time lows and limited inventory should mean that prices remain stable. According to CNBC, while an election year can introduce volatility, it also should lead the Federal Reserve to be consistent in messaging in an effort to stay out of politics.
CNBC also says that according to an E-trade survey, Investors with $1 million, or more, in a brokerage account are significantly more bullish than they were a quarter ago. In Q4 2019 many of these wealthy Americans were fearful of a market drop and recession. Now 76% of millionaires grade U.S. economic conditions at an A or B, and there has been a 16% increase in those who expect the market to rise by as much as 5% in the first quarter. Optimism is good for ALL markets usually.
In our Santa Monica micro-market, things remain brisk in the less expensive segment and I was surprised late in the 4th quarter by the number of listings and sales during what is typically a slower time of year. There was a property that came on the market on Harvard just south of Montana Avenue in December for $2,450,000. Within a week there were 10 purchase offers on the property. My client was the Buyer that prevailed over the others and the sale closed quickly. 10 offers on one house in December is significant. The market is healthy (and there are at least 9 buyers still out there looking for a house).
Seems I upset a someone in the neighborhood last month with a bit I wrote about ADU’s. For this stakeholder to claim that I am encouraging people to violate the zoning rules is a gross exaggeration. Most folks don’t give a hoot about ADU’s and those that are building a new home and want to maximize the size of the house probably won’t be doing so by adding guest houses. They will more likely add basements or perform a significant remodel which will allow for a larger build then a 100% new construction would under the current code.
Speaking of building; In 2018, real estate construction contributed $1.15 trillion to the nation’s economic output, roughly 6.2% of U.S. GDP. It’s more than the $1.13 trillion in 2017 but still less than the 2006 peak of $1.19 trillion. At that time, real estate construction was a hefty 8.9% component of GDP.
DID YOU KNOW? The largest group of U.S. institutional investors are state and municipal pension plans. California and New York state funds alone contain close to $600 billion combined, with the nationwide system comprising over $4 trillion in assets. Retail clients account for 20% or $7 trillion of the total U.S. market ownership. (CNBC)
In real estate news…
Since the beginning of the year 9 properties have come on the market, two of which are already in escrow and three are re-listed “new” holdovers from last year.
The true new listings of 2020 are:
444 10th Street– Listed by Pence Hathorn Silver for $10,500,000. Over 8,300 SF on an oversized 11,000+ FT lot with pool, 4-car garage and pool house. Solid house built with high-quality, expensive materials.
808 Woodacres Road– Listed at $20 MILLION. Huge 1.22+ acre estate– one of the largest single parcels in Santa Monica. Main house was built by architect John Parkinson for himself in 1921. Includes a large guest house, full-sized tennis court, pool and spa.
1427 Georgina Avenue– Listed at $7,400,000. Buzz Yudell architectural built in 2010. The house is 5,200+ SF on a 60ft wide 8,847 SF lot. Last sold in 2018 for $7,000,000.
527 19th Street– Listed for $4,249,000. Unique and charming single story 3,300 FT home with pool, spa and guest room over the garage. This one already has multiple offers and should be under contract by the end of the week.
Four listings are in escrow:
533 24th Street– Listed at $4,500,000. Originally listed last March for 5,150,000.
1531 Georgina Avenue– Listed at $4,295,000. Was on the market for just two weeks. Was purchased last April for $4,600,000. The $4.6M Buyer was disappointed when instead of the City granting him a demo permit to build his new home, they gave the house a Landmark designation instead!
421 19th Street– Listed at $3,360,000. This one originally came on the market last September for $3,600,000.
716 21st Street– Listed at $3,100,000. Originally listed last September for $3,500,000. This probably would have sold for more but its historic significance scared away higher valuations.
319 Ocean Avenue– Listed at $2,895,000. Was listed for just 17 days before going into escrow.
Two sales so far this year:
312 16th Street– Sold for $5,015,000. Originally listed for $5,398,000.
609 21st Place– Sold for $4,300,000. Originally listed at $4,795,000.