A hot topic question in the local 90405 Santa Monica real estate market: is the area overpriced? Good question. In my opinion the answer is no, both for the short term and particularly in the long term.
Short-term, say, within the next 12 months.
Barring a catastrophic change in market conditions, the immediate future looks very promising for the Santa Monica 90405 zip code, both for Santa Monica homes for rent and Santa Monica homes for sale. Here’s why.
- Ample sustainable demand from local, US and international buyers and prospective tenants. Buoyed by a flood of tech companies and the firms that support them, Santa Monica’s 90405 zip code, aka “Ocean Park”, is seeing prices per square foot top $1,000 as buyers and prospective tenants compete vigorously for available properties to purchase or lease. This is in contrast to the real estate bubble days when “qualified” buyers had to compete with “unqualified” buyers who entered the market via “liar loans”. Sadly, both the “qualified” buyers and the “liar loan” buyers were competing against each other in the same market for the same properties. This “virtual” competition drove up prices of Santa Monica real estate to a level that was unsustainable. That is definitely not happening today. Even a quick look at the mountain of paperwork a prospective buyer needs to complete to get a real estate loan today is ample evidence that “liar loans” are a thing of the past. Today’s Santa Monica Real Estate prices result from competition between qualified buyers all competing to purchase current inventories of Santa Monica homes.
- Light Rail. With light rail scheduled to connect downtown LA and the Westside with central Santa Monica in 2016, home owners and tenants are anticipating the many benefits of being able to go downtown and back in a scheduled forty minutes instead of up to two hours spent driving in rush hour traffic.
- International traffic growth at LAX. LAX, already the 5th busiest airport in the world is undergoing a massive multi-billion dollar renovation. With record passenger numbers arriving in LAX generating business and leisure travel both short and longer stays. This adds to additional demand on Santa Monica real estate for short and long term stays.
Longer term, beyond next twelve months.
- Location, location, location. Great schools, close to freeways, beaches, the world-class city of Los Angeles and close to LAX international airport.
- Almost built-out land. 98.5% of local Santa Monica land is developed. As the saying goes, they are not building any more beach real estate.
- Demographics. The Santa Monica area has and continues to be a magnet for professional, middle class and wealthy residents. Looking at history in the last fifty years, the long term trend line is up in all three categories.
- City amenities. The City of Santa Monica continues to invest for the future with transportation, infrastructure, schools and other amenities being updated and improved.
About the author: Peter Sale is a local Santa Monica real estate professional specializing in the 90405 zip. Peter is unique in the 90405 real estate community in that he has bought, sold, lived in, rented, leased-out and leased-in multiple Ocean Park condos and homes. Peter is an expert on 90405 properties. Put Peter Sale Real Estate’s 30+ years of 90405 experience on your side when buying, selling or leasing in the 90405 zip code.
Peter Sale Real Estate – PH/TXT 310-291-3426 [email protected] PeterSale.com
CalBRE License: 0142422
171 Pier Ave #262
Santa Monica, CA 90405