Many of the holidays we celebrate don’t actually make a whole lot of sense. Valentine’s Day is the day of the year we have designated to show that special person how much we care about them by taking out a second mortgage to pay for a dozen roses that are going to die in a week anyway.
April Fool’s Day is when everybody does their best Ashton Kutcher impression for a day and “Punk” our closest friends and family members. Columbus Day commemorates the discovery by Christopher Columbus of the New World, which looked suspiciously similar to the old world to the people already living there.
But one holiday that does make a lot of sense is New Year’s Eve. Sure, the hype leading up to that magical moment as the clock strikes midnight can be overwhelming, as restaurants and bars hike up their prices and people’s inherent aversion to noise-making devices is temporarily suspended. And yes, the image of Mayor Bloomberg and Lady Gaga’s lip-lock as the ball dropped in Times Square left most of us scratching our heads.
But at its core, New Year’s Eve, more than any other holiday, celebrates the passage of time. In the weeks leading up to it, the media takes the opportunity to run retrospectives on the major events that defined the previous year so that we can not only reflect on all that has happened, but to look forward to the promise of a new tomorrow. So now that the haze of New Year’s Eve has dissipated, we can look back on 2011 with a clear field of vision and see just what happened in Santa Monica, the Pacific Palisades and Brentwood last year in the world of real estate.
Out of the three areas, Santa Monica took the hardest hit. The median sales price for condominiums in 2011 was $650,000, which represents a 4.3 percent decline from the previous year. However, it’s important to note that there were also 6.5 percent fewer condo sales for the year than there were in 2010, so that median sales price decline should be viewed appropriately. Santa Monica condos are also staying on the market slightly longer at 73 days, up 11 days from the previous year (see my previous article “Simon says time is money” for everything you need to know about how the number of days on market can affect you). The median sales price for single-family homes fell 6.8 percent from $1,550,000 in 2010 to $1,450,000 in 2011 and are staying on the market three days longer at 66 days than they were before.
In the Pacific Palisades, the condo market, small as it is, did suffer a bit with a 2.5 percent drop in median sales price to $663,500 from the previous year. But the real story in the Palisades condo market this year was the dramatic increase in the length of time condos are sitting unsold: 99 days. That is nearly a month longer than in 2010. However, the Palisades is really all about single-family home sales, and while median sales prices fell 4.2 percent, homes are selling 12.5 percent faster, spending an average of 64 days on the market. Further good news for sellers comes in the form of median sales prices, which are within 2.8 percent of asking prices in 2011, as opposed to a 4.1 percent difference in 2010.
In Brentwood, median condo sales prices fell most sharply at 16 percent, from $682,000 last year to $587,500 this year, although the number of condos sold actually increased 20 percent from 131 to 158. Just like in Santa Monica, condos stayed on the market 11 days longer in 2011 than they did in 2010. But while the condo market in Brentwood may have suffered in 2011, the median sales price for single-family homes actually increased 3 percent from $1,720,000 to $1,775,000. This could be because inventory in Brentwood was down 15 percent from the previous year, making each home that comes on the market inherently more valuable. That may also serve to explain why at 70 days, single-family homes in Brentwood are selling faster than the year before (granted it is only a two day difference, but as someone so wisely once said, “time is money.”).
So while our year in review does present a mixed bag of sorts, areas like Santa Monica, the Pacific Palisades and Brentwood will always remain among the most desirable areas to live in Los Angeles, and thus provide long-term investment security. While home values may fluctuate by a few percentage points here and there as our economy continues to recover, there is every reason to believe that 2012 will be the year when the market will stabilize and more marked growth will occur. After all, Simon Says that when it comes to Westside real estate, what goes down will eventually come up. Happy new year to all!
Simon Salloom is a realtor at Partners Trust Brokerage and a Santa Monica resident.