Real Estate Market Forecast for Santa Monica in 2023

Real Estate Market Forecast for Santa Monica in 2023

  • Winston Cenac
  • 10/26/23

Santa Monica has beachside charm and urban sophistication. Its legendary Muscle Beach is a testament to physical prowess and a symbol of the vibrant energy that runs through the city. The famous solar-powered Ferris wheel lights up the Santa Monica Pier as the sun sets, casting a glow on the bustling amusement park below.

With three miles of pristine beach, it's no wonder that the coastal spirit infuses every facet of life in this iconic city. Fine dining establishments with ocean views, vibrant street murals celebrating the surfer's paradise, and the ceaseless sound of the waves make it evident that the beach isn't just a location here – it's a way of life.

Santa Monica stands proudly as one of the most sought-after destinations on the West Coast. Here, the real estate spectrum ranges from opulent multi-million-dollar estates that offer breathtaking panoramas to cozy studio apartments perfect for the urban dweller. The city has a tapestry of neighborhoods, each exuding its unique personality, ensuring every individual can find their ideal nook.

Adding to its allure, Santa Monica is a key player in the thriving 'Silicon Beach' — a hub for over 500 technology companies. The blend of laid-back coastal vibes with cutting-edge innovation makes Santa Monica a place to live and a lifestyle to embrace.

Santa Monica market dynamics

Santa Monica's real estate scene can best be described as a seller's market, though it is on the brink of transitioning to a neutral market. What does this mean for potential buyers or sellers?

In a seller's market, demand for homes surpasses the supply. It often results in properties selling quickly, sometimes even with multiple offers or above the asking price. Sellers have the upper hand as they can be more selective about accepting bids, and it's not uncommon for buyers to make concessions to ensure their bid is the winning one.

On the flip side, a buyer's market is characterized by an abundance of properties available with fewer buyers in the mix. This scenario offers buyers the luxury of choice, often allowing them to negotiate better terms and prices. Sellers may find their properties are on the market longer and need to be more flexible in negotiations.

Treading the middle ground is the neutral market, where the number of buyers aligns closely with the number of available properties. Neither party has a distinct advantage, often resulting in fairer prices and more balanced negotiations.

The current seller's market suggests a favorable climate for those considering selling a home in Santa Monica. However, as the market edges closer to neutrality, sellers might experience a slight shift, with properties taking a bit longer to sell and buyers gaining a tad more negotiation power. Conversely, buyers might find the impending shift towards a neutral market a welcome sign, offering a more balanced playground for property negotiations.

Santa Monica's current housing landscape

Diving deeper into Santa Monica's real estate numbers, the median sold price for homes presently stands at $1,612,675, equating to approximately $1,053 per square foot. While these figures certainly reflect the premium nature of Santa Monica's real estate, it's noteworthy to mention a slight dip.

Since August 2022, the median sold price has experienced a minor decrease, registering a 0.1% drop. Though it's a subtle shift, it offers potential investors and homeowners a lens through which they can gauge the ever-evolving dynamics of this coastal city's property market.

A comparative look at Santa Monica neighborhoods vs. Greater Los Angeles

Navigating the real estate waters of Santa Monica and the broader Los Angeles area reveals distinct market nuances. Let's take a comparative journey through these regions.

Starting with the expansive metropolis of Los Angeles, it currently finds itself in a seller's market. The median sold price for homes in the city is $962,995, translating to a rate of $613 per square foot. This figure, while substantial, has seen a 1% decrease over the last year, signifying some cooling in LA's fiery market.

Zooming in on Santa Monica, the neighborhood of Sunset Park also enjoys the dynamics of a seller's market. However, homes here command a higher price tag, with the median sold price being $1,788,408 or $1,027 per square foot. But it's essential to note that Sunset Park has seen a significant market adjustment, with its median sold price declining by a considerable 13.3% from the previous year.

Contrastingly, North of Montana, another cherished Santa Monica neighborhood currently leans towards a buyer's market. This prestigious enclave boasts properties with a median sold price of an impressive $4,280,000, which translates to a robust $1,510 per square foot. Yet, even in this upscale territory, there's been a downward adjustment. Over the past year, the median sold price in North of Montana has dropped by 8%.

These figures paint a multifaceted picture, with each area showcasing its unique market trends. For potential buyers or sellers, understanding these nuances can offer invaluable insights, guiding more informed decisions in the complex world of real estate.

Santa Monica's housing supply

As we delve into Santa Monica's housing supply for August 2023, several intriguing trends come to the fore. Currently, the city showcases 262 homes listed for sale. This figure has risen by 11% from the previous year, reflecting increased availability for potential buyers.

Mirroring this upward trajectory in listings, the number of homes changing hands has also surged. Sales have increased by 17.5% year-over-year, indicating an invigorated market activity and higher transaction volumes.

Yet, while the numbers show a dynamic market, it's essential to consider the nuances of these sales. A significant portion — 60%, to be precise — of homes have been sold below their initial asking price. It suggests that while there's an increase in activity, buyers have been able to negotiate and leverage the rising inventory to their advantage.

On the time front, homes in Santa Monica are taking a tad longer to find their new owners. On average, properties are now spending 42 days on the market, a slight uptick from the 40-day average of the previous year. While the difference might seem marginal, it points towards the importance of pricing and presentation in this evolving marketplace.

Santa Monica's real estate pulse

Santa Monica's real estate landscape is a dynamic tapestry of neighborhoods, price points, and market trends. Currently positioned as a seller's market but inching towards neutrality, it boasts a broad spectrum of property offerings, from opulent estates to snug apartments. When juxtaposed against the wider Los Angeles region, the city's market nuances offer intriguing insights for potential buyers and sellers. With home values showcasing historical resilience, the time seems ripe for considering property transactions in this iconic coastal city.

The edge of local expertise

Santa Monica's unique property scene requires more than generic real estate knowledge. Winston Cenac of Bulldog Realtors understands the area's nuances, from the individual vibes of neighborhoods to market fluctuations. He can expertly guide clients, ensuring they get the best possible price, regardless of market conditions, making the journey of buying or selling easier and more profitable.

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