CITYWIDE — Home prices may be relatively holding steady in Santa Monica, but it appears more buyers — and particularly sellers — are letting caution rule.
Prices in the city by the sea are actually up in most areas, with the North of Montana 90402 zip code showing the most strength, boasting a 15 percent jump in prices in July 2011 compared to the same period last year, according to stats by Realtor.com. But, it’s the inventory of available homes and condos that tells the real story.
“There’s not much to sell,” said realtor Gabriela Manakova with Keller Williams Realty, who is based on Ocean Park Boulevard. “People still want to buy, [mortgage] rates are really low.”
Listings are down as much as 58 percent in Santa Monica, according to the latest statistics.
Manakova believes the local market is still showing strength despite the lack of available properties, mostly due to the demand to live in Santa Monica, a locale known for its quality of life, good public schools and proximity to the beach. But, she said the willingness of buyers to pay high prices only goes so far and is stymied by the lack of available listings.
These beliefs are illustrated by the raw numbers. For instance, there are just 78 listings in the 90405 zip code, a steep 42 percent drop from July 2010. With few homes available, Manakova and other local realtors believe that prices are staying afloat because of the weak supply versus the high demand to live in Santa Monica.
“A lot of buyers are still on the fence,” Manakova said. “They are asking themselves if they should wait longer.”
She said that complacency may bite perspective buyers twice. First, if they wait, prices may continue to rise forcing them to pay a higher price to buy in Santa Monica. Second, when the current historically low mortgage rates go up they may end up paying more in the long run. Her advice to buyers is to look for something that suits their needs and take the plunge.
“If we haven’t hit the bottom, we’re very close,” she said.
Realtor Lidia Simon, who has a number of listings in Santa Monica, agrees with Manakova’s assessment, adding that the problem is exacerbated by the fact that buyers are looking for deals while many sellers are unrealistic about what their properties are worth. Couple that with the uncertainty on Wall Street and the economy in general and it makes the market a bit more complicated.
Despite the low inventory in Santa Monica, the local market is faring much better than nearby Los Angeles, where home prices are down 11 percent from this time last year. Hopes that the recession was coming to an end in the early part of the year have given way to the reality that the economy has a ways to go before returning to the salad days of 2006-07.
A recent Associated Press survey revealed that another recession is not likely over the next 12 months, but meaningful improvement will continue to be fleeting. Economists say that high unemployment and weak consumer spending will continue to hold back any real growth well into 2012.
“There’s lots of hysteria about what’s going on in the stock market right now,” said Simon, who is based in Malibu and Brentwood. “People are nervous.”
That fear has made its way into the local market, but Simon said that she’s confident Santa Monica will withstand the current worries and hopefully rebound in the coming months.
One of the few groups undeterred by the lingering economic slump are investors.
According to Realtor.com statistics, investors outnumber home buyers 3 to 1.
“While some might be reluctant to buy real estate right now, others are taking advantage of the historically low mortgage rates and home prices,” said Candice Cerro, a spokesperson for Realtor.com.