Market Conditions for Santa Monica Real Estate, February 2008

February 16, 2008 at 5:10 pm Leave a comment

The real estate market has softened in Santa Monica over the past six months, prompted by the sub-prime mortgage crisis, which has made securing regular real estate loans more difficult, particularly in the higher price ranges. This softening is now encouraged by broader fears of a recession and the general state of the economy.

But, as before, the reality in Santa Monica is better than the national, state, or even regional headlines might lead a reader to believe. Prices are edging downward, not plummeting as they are in other parts of the state.

Since the first of February, there have been approximately 45 new listings of single-family homes, townhouses, and condos. Meanwhile, there have been approximately 40 price reductions to existing inventory.

As of today, there are 132 condos and townhomes on the market in Santa Monica; 43 have closed escrow since December 1. (Data obtained from the MLS.)

For single-family homes, 80 are on the market right now, with 34 having closed escrow since December 1.

While 132 condos and 80 single-family homes may seem like a lot—and it is a lot compared to what was on the market for the years 2002-2005—the numbers represent only a little more than a six month inventory of condos & townhouses and less than five months inventory of single-family homes. A six-month inventory is the standard by which a normal market is measured.

Implications of these numbers for Sellers and Buyers: for Sellers, now is not the time to get overly ambitious with your asking price. Do you want to list your home or sell it? The current market gives clear indications that you can sell and do so at a reasonable price.

For Buyers, you can get a good deal compared to a year ago or even six months ago. But I sincerely doubt that we’re going to see prices go 20 percent or more below current levels. If you say that you want to pay what prices are going to be in six months, then you need to wait those six months and see what those prices are…and those prices may not be dramatically different from what they are today.

I’ve been following several market niches intensely for various clients, including townhomes in Santa Monica and single-family homes in Westwood. If you have a question about how a particular market niche is doing, then either ask here or drop me an e-mail at jimbrunet@santamonicahomes.net or give me a call at (310) 508-6878.

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Entry filed under: Market Conditions.

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