PRICEY DIGS: Santa Monica was rated the fifth most expensive real estate market in the nation by Coldwell Banker. (photo by Brandon Wise)

DOWNTOWN — Housing prices might be down but the cost of owning in Santa Monica still requires deep pockets.

A recent report by Coldwell Banker found that Santa Monica has the fifth most expensive residential real estate market in the country, a ranking that experts attribute to the desirable beach location and wealthy population.

The annual study compares the average prices for similar 2,200 square foot, four-bedroom and 2.5 bath homes in the United States, Puerto Rico and Canada. With an average price tag of $1.46 million for such homes, the seaside city is among seven California markets in the top 10, beat only by La Jolla, which lead the list with $2.12 million, second place Beverly Hills with $1.98 million and fourth place Palo Alto where homes are about $1.49 million. Manhattan and New York City were excluded from the report because of the lack of single-family homes.

The most affordable market was found in Grayling, Mich. where the average 2,200 square foot house costs about $112,675. The national average price for such a home was $363,401.

Charles Pence, a broker with Coldwell Banker whose been in Santa Monica for 31 years, said the strongest zip code in the city is 90402, which covers the neighborhood north of Montana Avenue where the homes are considerably larger.

Housing values in Brentwood and Pacific Palisades are about 30 percent down from the peak of just a few years ago, while Santa Monica as a whole is in the low 20 percent range, Pence said. The homes in 90402 on the other hand are down on average by about 14 percent.

The neighborhood was relatively resilient to the conditions of the volatile market for several years while the housing values in communities around it fell. It wasn’t until the big crash in the fall of 2008 when prices decreased drastically north of Montana, Pence said.

While about an average of 10 houses closed every month during the height of the market, only about three sales took place during the first 120 days of 2009, Pence said.

There are signs of recovery — whereas there were about 55 listings in the 90402 at the beginning of the year, the figure has slimmed down to 25 today.

“The lack of inventory is a true identifier of what is going on in the marketplace,” Pence said.

Jim Brunet, a local RE/MAX agent said the Santa Monica housing market started picking up in June, particularly for homes in the lower-end of the spectrum.

The asking price for a two-bedroom, single-family home went from a median of $1.75 million in March of this year to $986,000 today while a two-bedroom condo has stayed even at about $799,000, he said.

“When the market first fell in the fall and into the winter and spring, it was because there was uncertainty and no one knew where the bottom was,” Brunet said. “Now the economy is not necessarily good but people feel we’re at or near the bottom or stabilizing.”

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