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

Simon Salloom (Partners Trust) — Sun, 10 Feb 2008 00:05:43 -0800

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

Simon says: "What happened to our real estate values in 2007?"

Simon Salloom (Partners Trust) — Sun, 10 Feb 2008 00:03:28 -0800

Simon says: "What happened to our real estate values in 2007?"

Written by Simon Salloom. Originally Published in the Santa Monica Daily Press.

So, is everyone ready to see how 2007 stacked up against 2006? And, how it looks compared to our peak in 2004? Please note that in this article, 2004 is considered the peak of our most recent housing boom because of the number of transactions that occured.

In 2007, Santa Monica Single Family Homes hit their highest median sales value of $1,691,750. In 2006, the second highest year on record, we ended with a median sales price of $1,575,000. The sales dollar volume (the amount of dollars spent on Santa Monica houses) was up from $510,541,226 in 2006 to $569,571,243 in 2007.

The number of days on market in 2007 averaged 46 days, (up two days from 44 days in 2006). The number of single family properties sold was 263 in '06 and 270 in '07.

Overall, Single Family Homes in Santa Monica did notably better in 2007 versus 2006. The increase in the median sales price by about $100,000 and a slight increase in the number of homes sold, is in striking contrast to the media's accounts of collapse and misery.

Santa Monica Condominiums had a different experience. Santa Monica Condos had a median sales price in 2006 of $755,000. In 2007 the median sales price increased to $783,000. Sales volume was at $417,848,122 in 2006. While in 2007, sales volume was down notably to $358,869,970.

The average days on market was about two months (57 days) with a total number of sales at 408; this is a decrease in the number of sales from 485 in 2006. It is also an increase of almost two weeks from the 44 days on market experienced in '06.

In consideration of the decrease in number of sales and the almost two week increase in days on market, the demand for condos went down in 2007 over 2006, even though median sales values increased.

A more studied approach of the condo market will show that higher-end condos (properties sold for over $850,000) had shorter days on market than the lower end condominiums. And, the North of Wilshire neighborhood faired better than most other condo markets.

Last year also experienced a significant mortgage industry shake-up. First-time homebuyers are the most suceptible to increased lender scrutiny, and these are the people who buy entry level condos. My guess is that once the mortgage industry settles down, and it becomes easier to attain mortgages, the condo market will begin feeling a little better.

At the height of the condo market in 2004, the average days on market was 42, there were 677 sales and a total sales volume of $465,763,460; the median sales price was $622,000.

For single family homes in Santa Monica in 2004, there were 333 sales, the average days on market was 37 and the Sales Dollar Volume was $549,427,055. The median sales price was $1,425,000.

So, some changes to our market yes. Misery, tragedy, desperation-- no.

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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?"

Simon says: "What happened to our real estate values in 2007?"