Santa Monica (Area 14):Single Family Market. Again, we see how slow a prime market has become: four homes closed in January 2009 in Santa Monica. Sale prices were $2.5m, $1.9m, $1.2m and $895K.
A “fabulous California Cape Cod with legal 2nd unit/guest house” at 4th Court and California Ave sold for a cool $1.88 million (see photo above). That’s 23% above the property’s $1.53 million sale in September 2002.
Through the course of the boom-to-bust price cycle over the past six-odd years annual property price appreciation in the most stable markets has reverted to the annual 3 – 4% historical mean. The double digit increases of the recent gogo-years have been followed by huge price drops, bringing homes back in line with affordability and earning power.
Sales volume is way down. The number of single family homes that sold in January in Santa Monica in the previous four years was: 11 (2008), 21 (2007), 12 (2006) and 19 (2005). 16 single family listings expired January 2009. The market is at a virtual standstill – and only the most motivated sellers are closing deals.
Condo Market. 15 condos sold in Santa Monica during January 2009. The median sale price in January 2009 was $635,000. However, 47% of sales were $520,000 or less.
The barrier to entry to this coastal city has been lowered, and first-time buyers are able to get the best deals in years. (Consider that for 2007, the median sale price of a condo in Santa Monica was $780,000.)
The vast majority of what is selling is the vintage 1980 and earlier ‘B’ product, and not the spiffy, new, contemporary (over-priced) condos, townhomes and lofts.
If the price is over $800,000, Seller beware, there won't be a lot of interest. Over-priced new developments don’t build sales momentum. In this down-market, these units will be ignored and will languish for months. Dealer incentives will be forthcoming.
Jamie Adner
www.adnergroup.com
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