Santa Monica Market Report March 2016
This market in Santa Monica keeps churning along with low inventory and rising prices. Buyers who are using loans are competing with domestic and international investors who have cash to offer. The millennials are starting to buy in limited numbers but many are still renting by being seduced in to renting nicer places without the stress of buying a lesser place luxurious place further from the beach for the same expenditure.
The problems with these millennials waiting to buy is that rents are rising at a faster pace than listing prices. In addition, by waiting to buy for a few years, a younger person will leave a considerable amount of money on the table as prices are currently appreciating 6-9% minimum a year. Soon, this talented generation making money at our local tech companies will see themselves priced out of the housing market like their predecessors, the X generation and now baby boomers still recovering from the financial crisis in 2010.
So now, as interest rates begin to rise after the next Fed meeting, our Santa Monica area will not be as affected by the interest rate hike like other areas. In other areas, any interest rate hike would slow the market appreciation but in an area like Santa Monica, with so many cash offers, I don’t foresee prices stalling but rather continuing to go up. In that regard, it’s important that sellers and agents keep a steady eye on the market and react accordingly. That is why I have written this column so that I can know the market better and so can you. They say the “teacher” learns as he teaches. The following information was taken from the Southland Regional MLS and is deemed to be correct. I’m only reporting on listings taken, sold and or closed that had a status change during the month of March. The absorption rate at end of this article will use data from the first quarter for terms of that calculation.
So to bring you up to date, there are currently 129 active listings on the market in Santa Monica. Of this total count of 129, only 54 of these were listed during the month of March. The most expensive one listed during March was priced at $17,800,000 and was located at 2121 Mesa Dr. It had interior square footage of 9288 with a lot size of 22,881 square feet. It had 5 bedrooms and 7 bedrooms. It came on the market in late March but had been on the market for 350 days prior to it being listed again.
The second highest listing was priced at $14,775,000 and is located on the same street. The third most expensive listing was located at 951 Ocean Av #303 and had a list price of $7,996,000. It was a 3 bedroom and 3 bath condo with total square feet published at 3165.
The average priced listing in Santa Monica taken during the month March was $2,676,583. The average of all homes listed during March had an average square footage of 2173. On average, the bedroom count of a home listed in March was 3 and the average bathroom count was also 3. The average cost per square foot was $1,120.22
The medium of all March listed properties came in at $1,797,000.00. The difference between medium price and average price is this: Average price is just an average of all listing prices while the medium price is the middle price in a one liner list of listed properties. This means that it’s not the highest, lowest or average but the specific listing price that’s right in the middle of the list line item list of address in ascending order.
Back Up Offer Listings:
There were 14 listings that went into “Back Up Offer” status during March. These type listings are under contract but not put in pending status yet as they are encouraging “backup offer” for some reason. In most cases, these homes are in escrow but being reported as in Back Up status versus Pending Status.
Of the listings in this Back Up Status, the most expensive one had a list price of $6,450,000. It was a 5 bedroom and 6 bath located at 219 23rd. It had 6200 square feet and had only been on market 30 days, when it accepted a signed contract. It has a dollar per square foot of $1,040.00 This medium priced listing came in at $1,499,500 and contained 3 bedrooms, 2.5 baths all in 1519 interior square feet. It was located at 817 10th St #309.
The average list price of all the Back Up listings was $1,793,643. The average bedroom count was 3 and the average bathroom count was 2.71. The average for square footage of all these listings in Backup Status was 1774 square feet. The average dollar per square feet came in at $1,003.02.
Pending Status Listings:
There were 7 listings that went into Pending status in the month of March. The highest listing that went pending had a list price of $3,690,000. It had 4 bedrooms and 3 bathrooms, all in 3756 square feet. The dollar per square feet was $982.43. It was located at 507 11th St. The medium list price of a home that went pending was priced at $1,499,000 with a dollar per square foot at $868.67. The average listing in this category had an average price of $1,823,414. The average pending listing had 4 bedrooms with an average bathroom size of 2.71. The average dollar per square foot for all pending listings was $924.56.
During the 31 days that make up March, there were 53 homes that closed escrow. The highest listed price for a listing sold during March was $7,350,000. This listing was located at 101 17th St and featured 6 bedrooms and was highlighted by 10 bathrooms. The square footage for this one came out to 8,578 and had a lot square footage of 14,461. It was on the market for 171 days. The dollar per square foot for this home was $856.84. The medium sold listing had a list price of $1,620,000. It featured 3 bedrooms, 3.17 baths all in 7,776 square feet. It was located at 2018 Pearl. The average price for a listed home that closed escrow during March was $2,090,522. The average bedroom count was 3 while the average square footage was 2062. For homes that sold during March, the average days on the market were 165.
So with there being 129 active listings on the market and the average 53 homes selling per month, the absorption rate is 2.43. The absorption rate is the rate at which active listed homes are sold in a measured real estate market during a given time frame such as one month. It is calculated by dividing the number of available listings by the average number of sales per month.
In closing, I would like emphasize the fact that prices will continue to edge up as inventory continues to decrease. With interest rates predicted to go up later this year, my feeling is that this is the time to invest in the market. Call me for a private and free consultation. I consult by voice, text, email or “pictures”.