This past year or so the country experienced massive injections of stimulus to dig out of and restart the economy from the Pandemic. Accompanying the rapid resulting economic growth, has been a rapid increase in inflation. In 2022, the pace of that inflation will slow, as will the pace of economic growth, so even though the FED has signaled it will raise interest rates 3 times, I don’t think economic growth or inflation will warrant it. I also do not see an “all clear sign flashing from Covid.” I predict 2 interest rate hikes, at most, meaning Mortgage interest rates will remain between 3% -3.75%. Money will remain relatively cheap to borrow, home price will remain in an upward trend, though the pace of that price appreciation will slow to the historic mean of 3-5%.
Factors Affecting Real Estate in the Beach Communities:
It hasn't been as pleasant as usual to stroll along Main Street these days for a variety of reasons...
Homeless. The city of Santa Monica needs to address this issue head on and find solutions that address addiction, mental health and affordable housing - a wholistic and comprehensive approach is needed.
Vacant Store Fronts. "The Rents Are Too High" Yet Landlords on Main Street hesitate to lower them because it devalues the paper value of their asset. Many will simply keep them empty and/or wait til a Corporation with deep pockets comes along. The City of Santa Monica should explore either penalizing or incentivizing Landlords to lower their rents on vacant spaces of over 6 months in order to get them rented more quickly. Why has the restaurant on the corner of Main & Ashland been vacant for over 3 years? How can that be allowed to happen.? More opened stores on Main Street means more activity and if rents were to come down more shops that actually service the immediate community could prosper. The only businesses currently surviving on Main Street are those serving $35 entrees or bars that stay open round the clock.
Other factors affecting home prices in our Beach communities include crime, pollution & traffic. (I could write a separate blog on each of these).
And lastly: Covid.
It's fair to say that Santa Monica has been one of the best places to live during this Pandemic. To be outside, on the bike path or the beach has been a savior for the mental (& physical) well being of some many people. Santa Monica Beach ranks as one of the best beaches in the country. We should each do our part to protect it.
Overall outlook: Positive!
The weather, the relaxed lifestyle and quality of life in Santa Monica remains highly desirable. We should push back & protect against overbuilding and other initiatives that lesson the appeal of Santa Monica as a quality community with good schools, clean beaches & safe streets. Santa Monica remains a great place to invest and a great place to call home.
Here’s to health, happiness and good luck for all in the New Year.
P.S. I've lived here for 20 years, when it comes to residential real estate buying and selling, I can help you navigate these waters. People & off market opportunities come to me all the time. Reach out and I can advise and connect you with the right buyer, seller, home and investment.
"I love where I live and I buy & sell what I know..."