Santa Monica Residential Real Estate Market Report
Santa Monica real estate is going strong with some good news for buyers and some good news for sellers.
Sales Prices
Median sales prices dropped slightly this month, going from $2,385,807 in April to $2,340,000 in May. This 1.9% decline in sales prices isn’t cause for any concern, especially considering the mean sales price is up 18.3% from April.
As a refresher: the median sales price is the middle value in the list of all sales prices in the area (half the properties were more expensive than the median, and half were less expensive). The mean sales price is the average of all property sales in the area. The median sales price is generally a better indicator of the market because an exceptionally high or exceptionally low sale can sway the mean, while having minimal effect on the median. But it is interesting to take note of both when evaluating market conditions.
The median sales price per square foot is down 12.2% from $1,263 in April to $1,109 in May, which is good news for buyers. But don’t worry sellers, the median sales price per square foot is still up 3.4% from this time last year.
List Price to Sales Price Ratio
May’s list price to sales price ratio was up to 103.2%, which is great for sellers. It indicates that you could be able to get your asking price, and then some (3.2% more than your asking price to be exact)! Of course, it’s vitally important that your asking price is in line with the rest of the market. If your asking price is higher than the asking prices of comparable properties, those other properties will sell while yours goes stale. And if your house sits on the market for a bit, people start wondering what’s wrong with it. Don’t make the mistake of adding 3.2% to your asking price. Price in line with the market and let the market work for you!
For buyers, this high list price to sales price ratio means you need to bring your best offer! This market won’t allow low-balls, so be ready to offer full-price, or slightly more. Your Realtor will be able to help you decide how much to offer by comparing the asking price to the recent contracts and sales of comparable properties.
Inventory
Twenty-two new listings were added to the inventory of homes available for sale in May. This is down from twenty-nine in April. Lower inventory is good for sellers because buyers are competing over fewer homes. This may be why the list price to sales price ratio is so high currently. Again, buyers, you need to present your best offer the first time. Sellers may not be willing to hassle through counter offers, especially if there’s a competing offer!
Foreclosures
May’s foreclosure rate is up slightly from .53% in April to (a still low) .63%. This means less than 1% of homes in Santa Monica is in foreclosure, which is good news for the market as a whole. For reference, the foreclosure rate at the height of the recession was 5.47%.
Interest Rates
Interest rates are in constant fluctuation, but have remained steady at historically low rates. Conventional loans are lingering just above 4%, and VA/FHA loans are just below 4%.
Purchasing a home while rates are low dramatically impacts your monthly payments and total expense. If you’re on the fence about purchasing a home, the current interest rates should factor heavily into your consideration.
For example, a $2,000,000 loan at 4% interest would cost $9,548.31/month (not including taxes, insurance, or HOA fees) and result in $1,437,390.13 in total interest over 30 years. If you were to wait to buy when interest rates hit 5%, your monthly payment (again, not including taxes, insurance, or HOA fees) would be $10,736.43, and you would end up paying $1,865,115.69 in total interest over 30 years. Calculate your mortgage payments here.
Are You Ready to Buy or Sell?
Think you might be ready to sell your home? Contact me today for a free list price estimate.
Interested in buying? Take this quiz [link redacted] to see if you’re ready to buy a home.
Figures based on information from California Real Estate Technology Services, Inc. Data is for informational purposes only and may not be completely accurate due to MLS reporting processes. Therefore, we cannot guarantee accuracy. This data reflects a specific point in time, and cannot be used in perpetuity due to the fluctuating nature of markets.