Simon says:"What does Northampton Massachusetts have in common with Santa Monica California?"

Simon says:"What does Northampton Massachusetts have in common with Santa Monica California?"

What does Northampton Massachusetts have in common with Santa Monica California? Besides Northampton being the town I grew up in and Santa Monica being my adult home, not a lot. Northampton has around 50,000 residents, instead of 90,000. The five colleges within 15 minutes of it's downtown center are it's major industry, while Santa Monica's homeowners are employed at the highest levels in a myriad of economically strong professions. It's an old New England town most famous for it's all women's school Smith College. Santa Monica is famous for a lot of things. Northampton is the home of indie rock bands, the Pixies, Dinosaur Jr., Sebadoh and now the residential home of Sonic Youth. So, it's cool, in an indie rock type of way. I'm not sure Santa Monica is as cool, but it certainly has better weather and more opportunity for lucrative employment.

I've been reading articles, hearing on the television and on the radio about the housing slump. It is a legitimate claim, yes, the housing market in the U.S. is in a housing slump and all the "experts" predict it is going to get worse. The news people pull numbers from the worst hit areas of the country and tend to omit the areas affected to a lesser degree. Northampton has been affected to a lesser degree, so I thought it would be interesting to compare it to Santa Monica's housing market.

In Northampton, according to Denny Nolan an accomplished and very active residential Realtor (and my Father's agent,) single family home values are down about 10-12% and condo values are down 20%. The number of home sales has also decreased by about 10-15%, while the average single family home sales price has stayed the same. In Santa Monica, we had about the same dollar volume of single family home sales in 2007 as we did in 2006. Additionally, the median sales price had gone up by about $100,000 in 2007 over 2006.

The main reason for condo values being down so dramatically in Northampton is the fact that prior to the recent housing boom, there were very few condos in Northampton. Speculators came in and bought up buildings and converted them. Unlike Santa Monica and Los Angeles, there are no restrictions on condo conversions. In Santa Monica for example, the only way you can convert an apartment building to condos is if the owner filed the appropriate TORCA paperwork about a decade ago (read more about TORCA's on my web-site.) There are only a handful of TORCA eligible properties left. In Northampton you call up your attorney and within a few days your apartment building is a condo building ready for resale on the public market.

Like in Florida, Nevada and the other areas of the country whose property values have been the hardest hit, Northampton's condo market was over saturated by out of area speculators looking to make a fast buck. In Santa Monica this just wasn't possible. This would explain why in Santa Monica the median sales price for a condo in 2007 was $783,000 up from $755,000 in 2006. Santa Monica's condo market went down from $418 million to $359 million for sales volume in 2007. This is likely due to the difficulty for many buyer's in this price range to attain financing, which occurred around August of 2007.

Northampton has about as much in common with Santa Monica as Santa Monica has in common with the heavily hit real estate markets of Stockton California, parts of Nevada and parts of Florida. The national real estate market is in flux-- how this affects you depends on where you live, not which news cast you hear.

Santa Monica Real Estate

Simon Salloom is a Realtor who specializes in Santa Monica and Brentwood Real Estate with Colwell Banker. View his web-site and blog at www.SantaMonicaSimon.com