Shabi Jafri of Santa Monica, California is an entrepreneur and real estate investor. In the following article, Mr. Jafri discusses what homebuyers, investors, and realtors are all seeing when it comes to the hot Santa Monica real estate market.
Santa Monica is home to some of the most expensive real estate in the country, with no arrest in site according to Shabi Jafri. With its prime oceanfront location, high-end shops and restaurants, and highly sought-after luxury homes, Santa Monica is known for its relaxed, beach-town vibe and its many outdoor activities and attractions. In the last year, the real estate market has grown significantly and looks to be on track to continue expanding according to Shabi Jafri of Santa Monica.
Although Santa Monica is one of the most expensive areas of the United States, luxury home sales have been largely unaffected by rising prices. In this article, Shabi Jafri explores some of the recent trends in Santa Monica’s real estate market and make predictions as to where it will go in the coming few months.
Median Home Prices are Up
Since June 2021, median home prices in Santa Monica have risen more than 16%, from $1,371,072 to $1,593,958. Compared to the national average of 6%, it’s clear that demand for homes on California’s sunny coast is high. Yet, due to the average income of most Santa Monica residents, rising interest rates and prices have done little to slow purchases says Shabi Jafri.
Inventory is Up but Sales May be Cooling Slightly
Compared to 2021, roughly 11% more houses have gone on the market, signaling growth in real estate development. Most of these homes have 3 or more bedrooms and cost between $1.7 million and $4.0 million. Despite the increase in inventory, though, sales have dropped more than 17% compared to this time last year.
Shabi Jafri of Santa Monica, California says that this could be due in part to rising prices but it’s unlikely considering that 63% of homes have sold above their asking price. Additionally, homes are selling 34.3% faster than they were the year before. As the economy has been slowing down, this could signal a slight drop in the real estate market but, with prices up, it should balance out.
What’s Driving Market Trends in Santa Monica Real Estate?
There are several factors influencing the real estate market in Santa Monica, California. The most significant is the state of the economy. With inflation on the rise and newly raised interest rates, the purchasing power of buyers has decreased, Shabi Jafri notes. Additionally, more stringent regulations have put a damper on investment activity, as well as second-home purchases.
All of these factors have led to a slight decrease in sales but, with prices continuing to rise, the market is still strong. Another factor that’s influencing the market is the rise in construction costs. As oil prices remain high amid the Russo-Ukrainian War, it’s become more expensive to transport construction materials, causing housing prices to continue their upward climb according to Shabi Jafri of Santa Monica, California.
A Shift Towards Smaller Apartment Units
Despite Santa Monica’s shrinking population, there’s been a recent trend toward building apartment units throughout the city. Some residents worry that the addition of more affordable housing will drop real estate values but it’s more likely to provide a needed boost to the economy.
The trend seems to be driven by a combination of factors, including the high cost of living in Santa Monica, the city’s lack of available land, and changing demographics. Shabi Jafri says the arresting beauty draws more young people to the city, and they’re more likely to rent than buy. Additionally, the rise in construction costs has made it more expensive to build single-family homes.
Future Predictions for the Santa Monica Real Estate Market
Although there’s been a slight decrease in sales, the Santa Monica real estate market is still going strong. Prices are predicted to continue to rise in the coming months as the economy continues to rebound and more buyers enter the market. Additionally, the average home price is expected to rise another 6% next year, signaling a continued seller’s market says Shabi Jafri.
Currently, the market is particularly strong for sellers, with many homes selling above their asking price. In the coming months, we predict that this trend will continue, as buyers compete for the limited number of available homes. This will only continue as construction prices go up and home development slows down.
Therefore, if you’re looking for a second home on the California coast, Santa Monica might not be your best bet. However, if you’re selling, now’s the time to make the most of a highly competitive market and cash in on your high sought-after property says Shabi Jafri of Santa Monica, California.
The Bottom Line
The Santa Monica real estate market is booming, with prices predicted to continue to rise in the coming months. Despite a slight decrease in sales, the market is still strong, with many homes selling above their asking price. Shabi Jafri says if you’re playing with the idea of selling your home, now’s the time to do it.