The real estate market has been a rollercoaster for the last few years, and Santa Monica has not been spared. Homes in the Ocean Park real estate market have been flying off listings, with many properties receiving multiple offers, creating bidding wars.
For sellers, this has been a dream situation, but the potential uncertainty of what is to come can make them wary of moving too quickly. This market can be incredibly disheartening for buyers, with many choosing the wrong agent to work with and getting multiple offers rejected. There are few things worse than falling in love with Ocean Park real estate just to have your dreams dashed by another buyer.
Keep reading if you’re worried about the future for 2022 and beyond. This has everything you need to know about what to expect in the coming months in Santa Monica and if it’s the right time to buy or sell property.
There is a shortage of inventory
This piece written in early 2021 by Neal Leitereg of Forbes does a great job of addressing the inventory shortage that the Santa Monica area is experiencing right now. While it’s true that this is not an issue unique to just the Ocean Park real estate market but one that affects the whole U.S. market, Santa Monica is particularly desirable.
The interview suggests that the uncertainty of the pandemic led to more people holding onto their homes, with just 10-15 houses going on the market each day. The average before this uncertain time was between 60 and 100.
This sort of home hoarding led to an aggressive shortage of Sunset Park real estate opportunities. Housing prices soared in such an intense and unchanging seller’s market. It didn’t help that many residents from out of town started looking closely at Ocean Park real estate and what was available.
Those who were used to sky-high housing prices with zero land, such as in cities like Boston or New York, realized that California was a far better choice. They could get some land, stretch out, and enjoy the time they were forced to spend at home anyway.
Consider the difference for just a moment — for $10 million in real estate, you can get a tiny apartment in New York City or even a townhouse in Boston and put up with awful weather and too-close neighbors. Instead, you can look at Ocean Park real estate and get a beautiful kitchen and a little bit of land. With many companies going fully remote, new residents don’t even have to worry about finding a job; they just need a home office.
New construction is king
A seller’s market is where there is far less inventory than what the market demands. For every home for sale in the Sunset Park real estate market, numerous buyers are trying to seal the deal and move in. This is truly what skyrockets prices, and in the more desirable areas of the U.S. — like in Santa Monica — the prices can rise quickly. At the end of 2021, housing prices in Santa Monica were up approximately 23% year over year, a massive jump compared to the standard market growth.
The answer to this situation is new construction. Over 200 new builds have hit the market in recent months, and the Santa Monica Mirror reports a huge influx of condos and apartments coming. For those looking at existing single-family homes in the Ocean Park real estate market, though, houses will be an even better investment. This isn’t expected to change, with more buyers than ever wanting the true indoor-outdoor living experience and property that California has to offer.
The market isn’t going anywhere
There’s a big concern by people not invested in the current market that it is going to crash. This has been fed by the previous market crashes, which is a valid concern. However, this market is entirely different from the crash of 2008, when the housing bubble broke due to poor lending practices.
This market surge is due to a record number of people who ended up with a lot of disposable income, and they were no longer tied to a single place. Remote work, plus not having many extra expenses, helped bolster the Sunset Park real estate market and the U.S. market. It’s not a seller’s market because of lending practices but the simple desire to improve our quality of life.
Even if the market does cool off, Santa Monica is historically an area where investments hold firm. In previous market slowdowns, as noted in the above Forbes article, Santa Monica investments held, only seeing a minimal dip compared to the 20-30% value drops other markets saw.
A recent article in the LA Business Journal noted that because of the reasons for the hot market, growth is only projected to continue well into 2022. The projected three-year market looks even more prosperous for most residents and newcomers to the Ocean Park real estate market and beyond.
Ready to invest in Santa Monica real estate?
Are you considering investing in the Santa Monica market or placing your existing home or condo for sale? Even with all this good news on market projections, it can be overwhelming.
If you’re unsure where to start, reach out to Megan Whalen and her team with Compass. Megan has worked in the Santa Monica area, helping people with their Sunset Park real estate property for many years, and has helped many clients find and secure their dream property.