The Santa Monica Real Estate Market Authority

From the desk of Greg M. Ingerson, Attorney At Law

As we head into Summer, Santa Monica home sellers should begin to see a gradual decrease in the number of showings and inquiries for their home over the next few weeks.

Last month, the MLS summary showed that there were 229 homes for sale in Santa Monica and 46 sold. Translation, under current market conditions, in any given month, you have about a 1 in 5 chance of selling your home.

In other words, when pricing your home, the practice of adding a “Pad” or “Cushion” to make room for negotiating is not advisable in this market.

As an informed Home Seller, you should understand that with an increase in inventory “supply” there is a corresponding decrease in demand.

Home Sellers should pay close attention to “Current Buyers.” Similar homes that have recently “Sold” tell us what people are willing to pay for this kind of home, in this area, at this time.

Information about similar homes “Currently for Sale” tells us what we are competing against. Buyers considering your home are also inspecting these homes.

Moreover, “Expired” listings tell us what people are not willing to pay for this kind of home, in this area, at this time.

Home Sellers in this market should realize that buyers in today’s market will not overpay for a home and even if they would, the bank will not loan more than the home is worth when it doesn’t appraise.

So what can we expect? Demand should decrease a little over the coming weeks at least until the “sub-prime” mortgage meltdown crisis is figured out.

The Numbers Don’t Lie, Here Is What’s Happening:
On June 1, 2008, there were 229 active listings for sale in the Santa Monica Market (Area 14): 96 Houses; 52 Townhouses; and 81 Condominiums.

In the past year, there were 530 homes sold in Santa Monica (between 6.01.07 and 5.31.08): 213 Houses; 104 Townhouses; and 213 Condominiums.

What this means is that on a yearly average, the inventory is currently turning over at a rate of approximately 2.3 times per year.

Broken down even further by specific property type, we find that given the current absorption rates, we can expect Houses to be on the market an average of 162 days, Townhouses will be on the market an average of 180 days, and Condominiums should be on the market an average of 137 days.

Market Recap for the Month of May 2008
When one compares the May results with the yearly result, we find that there is an approximately 5 month inventory of homes for sale in Santa Monica.

Broken down by specific property type, we find that there is a 7.4 month inventory of Houses, a 3.7 month inventory of Townhouses, and a 4.3 month inventory of Condominiums on the market in Santa Monica. (Based on current absorption rates).

How should a Seller approach the market? The key in today’s market is proper pricing. If you are thinking of selling, now may be the best time to put your Home on the market for the foreseeable future before any additional interest rate increases are implemented.

How should a Buyer approach the market? For buyers, this is a good time to be in the market while sellers are willing to negotiate price and while interest rates are still low. For those hoping that the market will cool, any advantage obtained by waiting for prices to decrease may be offset by higher interest rates.

For more information regarding the Santa Monica and/or greater Los Angeles Real Estate Markets, please visit our website at http://www.LAHomeSearch.com for FREE information or give our office a call at 310.908.2172 for Free Recorded Information 24 Hours a Day.

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Santa Monica Home Sales by the Numbers
46 sold in May 2008
92 sold in May 2007

229 Current Active Listings
96 Houses
52 Townhouses
81 Condos

46 Sold in May 2008
13 Houses
14 Townhouses
19 Condos

22 Expired in May 2008
9 Houses
4 Townhouses
9 Condos

63 Contingent & Pending in May 2008
23 Houses
11 Townhouses
29 Condos

92 Sold in May 2007
33 Houses
28 Townhouses
31 Condos

63 Sold in May 2006
27 Houses
13 Townhouses
23 Condos

69 Sold in May 2005
29 Houses
16 Townhouses
24 Condos

95 Sold in May 2004
35 Houses
24 Townhouses
36 Condos

82 Sold in May 2003
32 Houses
22 Townhouses
28 Condos

87 Sold in May 2002
34 Houses
23 Townhouses
30 Condos

69 Sold in May 2001
40 Houses
13 Townhouses
16 Condos

92 Sold in May 2000
44 Houses
29 Townhouses
19 Condos

30 Expired in May 2007
10 Houses
7 Townhouses
13 Condos

18 Expired in May 2006
3 Houses
2 Townhouses
13 Condos

12 Expired in May 2005
2 Houses
3 Townhouses
7 Condos

10 Expired in May 2004
5 Houses
1 Townhouses
4 Condos

17 Expired in May 2003
6 Houses
6 Townhouses
5 Condos

22 Expired in May 2002
14 Houses
4 Townhouses
4 Condos

28 Expired in May 2001
7 Houses
9 Townhouses
12 Condos

20 Expired in May 2000
11 Houses
3 Townhouses
6 Condos

To search for bank owned properties on the market go to http://www.LAHomeSearch.com

To search for Southern California Real Estate including real estate in Beverly Hills, Brentwood, santa Monica, and Malibu go to http://www.LAHomeSearch.com

For Los Angeles Real Estate go to http://www.LAHomeSearch.com

To search for “For Sale By Owner” properties in the Los Angeles Real Estate Market visit http://www.FSBO.LAHomeSearch.com

Thinking of Selling? To get the most Money, Fastest Sale, and the Fewest Problems, visit http://www.LAHomeSearch.com

About the Author
Greg M. Ingerson, Attorney At Law & Real Estate Broker, is a real estate Broker with LA Home Search in Los Angeles, California. To learn more about the Los Angeles Real Estate Market, please visit http://www.LAHomeSearch.com