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# Housing climate cools
- URL: https://www.smdp.com/housing-climate-cools/
- Published: 2006-08-25T15:00:00.000Z
- Updated: 2026-10-23T21:17:29.000Z
- Author: Kevin Herrera
- Tags: Real Estate & Housing, Santa Monica, #archive-import

*BUYERS’ MARKET: Dip in sales nationwide doesn’t pop SM bubble*

CITYWIDE — While the housing market here may be experiencing a slight cooling trend, fears that an imminent implosion of the housing bubble are unwarranted, at least when it comes to the city by the sea, local real estate experts said.

Reports released this week by the National Association of Realtors and other industry analysts show sales of pre-owned homes, which account for about 85 percent of the housing market nationwide, dropped to levels not seen since 2003\. Compared to this time last year, sales fell 11.2 percent across the U.S.

But not in Santa Monica, where 151 homes were sold in the first half of this year, according to The Kirshner Group, a Westside residential real estate team affiliated with Coldwell Banker Previews.

The Kirshner report showed the total dollar value of those transactions was slightly more than $259 million, an 18 percent increase over the same period last year.

“The median prices of homes also appreciated,” said Wendy Kirshner, vice president of the Kirshner Group. “In June 2005, the median price was $1,835,000\. At the end of June this year, that had risen to $2,345,000, a gain of approximately 27 percent, indicating a continuing strong market.”

However, that’s not to say that perceptions are changing. Realtors specializing in Santa Monica sales said homes are staying on the market longer than they did last year. In 2005, a seller could put his home on the market and receive multiple offers within a day’s time. But now homes are lingering on the market for 40 days or more.

The blowback is due largely to the rising interest rates, higher mortgage rates and the tightening of lending qualifications, real estate experts said.

August is a slow month for real estate transactions as sellers are trying to squeeze another vacation in before the end of summer. Others simply do not want to deal with the hassle of moving so close to the start of school.

That may seem like bad news for some buyers, but those who are financially secure with good credit and determination are now finding it easier to drop a down payment.

“Buyers can negotiate a little bit, whereas before there was no wiggle room,” said Tica O’Neill, a broker with Molloy Realtors, Inc. in Santa Monica. “Buyers were paying much more than the asking price because they wanted to beat the competition.

“It’s not completely a buyer’s market, but now is the time to start looking for those who have been sitting on the sidelines, waiting for prices to stabilize.”

Realtors said the market is now correcting itself after two years of double-digit appreciation, in which the value of some homes increased by 40 percent.

“We are seeing in Santa Monica, as with everywhere, that the housing market is slowing down, but that’s in comparison to two years of unstable appreciation rates,” said Delores Conway,Ph.D.,director of the USC Lusk Center for Real Estate and co-author of the Casden Real Estate Economics Forecast.

“Trees don’t grow to the sky and we can’t have 20 percent or double digit price increases year after year,” Conway added. “That’s just not sustainable. I think we’re coming back down to Earth.”

Santa Monica is somewhat immune to factors that affect housing markets nationwide. With its seaside location, clear skies and cool breezes, good schools, not to mention its location to UCLA, LAX and Hollywood, Santa Monica is more than just a place to live, it’s an ideal destination to raise a family, realtors said.

The strong economy also protects the city from fluctuations in the market. With large employers like Google and Yahoo, not to mention Saint John’s Hospital and the scores of post production houses, there is a steady flow of affluent workers looking for a place to rest their heads.

“People want to live here more than anywhere else,” said Simon Salloom, a realtor at Coldwell Banker who specializes in Santa Monica and Malibu. “Whenever I meet with a client, they want to buy in Santa Monica. Many end up somewhere else because they just can’t afford it.”

With strict laws governing development and a lack of land available for new home construction, inventory is low while demand remains at an all time high, driving up prices.

Rent is also extremely high, so much so that it often match the cost of a mortgage, Salloom said. This forces many people to cut back on spending and save.

That has shielded Santa Monica as well from market fluctuations.

“It definitely takes a lot longer for the national trends to start showing up here because we are near the beach. We are in an affluent community and we do have a shortage of housing,” said Melissa MacFayden, a broker with Keller Williams Santa Monica. “Anytime you have that shortage with the kind of demand we have, you are not going to see a significant dip anytime soon.”

*Originally published in the Santa Monica Daily Press print edition on August 25, 2006.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/082506.pdf?ref=smdp.com)