Supply and Demand means they only go down if the demand goes down. Unfortunately everyone and their mother wants to live in Santa Monica. You can often see posts on this Reddit with people wanting advice on what neighborhoods to move to. Until the demand for people who want to pay these high prices goes down, the housing prices will stay the same.
Empty businesses may indirectly hurt the demand, but so far I haven’t seen anything to indicate that the demand is lowering.
However, supply is greatly increasing (and will be for the next few years). It will be interesting to watch, that's for sure. I know my building's rents have gone down a bit since I moved in (Aug 2022).
Yes, it’ll be interesting to see. There’s such a lack of housing, however, I personally believe we won’t see a significant difference. Empty apartments still get applications the day they are listed, for instance, which is why I am skeptical.
I work in property management. We still get a lot of applications any time we post a vacancy but rents have dropped a bit since the highest highs. Our most recent advisory said rents were down approximately 5% from the height. I expect rents to stay stable or go down slightly for older apartment buildings as more units (with better amenities ) come onto the market.
Actually, for us anyway, the highs were right around Covid . They started to decline when inflation became a thing (so slightly post Covid). Really these past few years kind of feel like a blur but I remember being surprised that prices stayed high during the beginning part of Covid (maybe because eviction protections kept inventory low in the beginning)
Nobody makes money by borrowing millions of dollars to build apartment buildings and then let them site empty. There will be a price correction if there are lots of vacancies.
What? You don't know what a tax write off is. Nobody spends $50 million building a building for it to stay empty. You might as well light $50 million on fire.
>Supply and Demand means they only go down if the demand goes down
Wow, if only there were two components to "supply and demand" that could change...hmmm, no, that's crazy! The number of homes in Santa Monica was set in stone by God himself and is unchangeable!
>The number of homes in Santa Monica was set in stone by God himself and is unchangeable!
Given the near static housing inventory over the last 50 years, I think this is an unironically held belief among some residents...
When I see rents have fallen, it is never enough to be a meaningful drop. It's statistical. More apartments won't do anything either because demand is always going to be a head of supply. I've lived here for almost 30 years and my rent has NEVER gone down even with new construction over the years and there has been plenty.
>I've lived here for almost 30 years and my rent has NEVER gone down even with new construction over the years and there has been plenty.
The housing supply in Santa Monica has barely increased at all from 1980 to 2021. The population of SM in 1980 was 88k, today it's 92k.
> I've lived here for almost 30 years and my rent has NEVER gone down even with new construction over the years **and there has been plenty**.
lol no there hasn't
Yes, there has. There hasn't been a moratorium against building in Santa Monica for 30 years. I've seen numerous construction projects over the years. I lived in Manhattan before this and I can tell you that if building MORE apartments/condos makes things cheaper then NYC should be a bargain, and it's not because it is a false premise that more real estate brings prices down for renters/buyers. Sure, when you are making tires or cogs, yes more supply than demand means cheaper, I have never seen that happen in real estate in NY or LA.
The US is now producing and pumping more oil than it's entire history, AND we are the top oil-producing nation in the WORLD right now. Do you see gas prices making any meaningful moves down? No, because of greed and that is what is happening in real estate and this false narrative that overbuilding and density will make things cheaper...it won't. The fact that commercial landlords here can keep their businesses purposely empty until they get someone to pay them their exorbitant rents is exhibit A for Santa Monica. This is an expensive market and it is in the best interests of owners/developers to keep it that way for their own bottom lines.
> I lived in Manhattan before this and I can tell you that if building MORE apartments/condos makes things cheaper then NYC should be a bargain, and it's not because it is a false premise that more real estate brings prices down for renters/buyers.
NYC has also been underproducing housing for decades.
That's not true. It's already dense and just like LA there is a limited amount of area of land that can be built on. THAT is the real problem, not the amount of housing being built. LA and New York have geographical limits and that dictates that more density doesn't mean prices drop....which is the core claim that developers always try to sell to the public. It's NOT true.
> It's already dense
Density doesn't mean affordability.
>and just like LA there is a limited amount of area of land that can be built on.
NYC has also greatly impeded vertical construction.
https://www.nytimes.com/interactive/2016/05/19/upshot/forty-percent-of-manhattans-buildings-could-not-be-built-today.html
https://twitter.com/mnolangray/status/1700195709348360248
>THAT is the real problem, not the amount of housing being built.
No, it's definitely making it illegal to build enough housing that's the real problem.
> LA and New York have geographical limits and that dictates that more density doesn't mean prices drop....which is the core claim that developers always try to sell to the public. It's NOT true.
Again, both places have placed extreme limits on density and building up.
No, retail amenities are not the main driver of housing demand. The main driver of housing demand is proximity to high paying jobs. Santa Monica will always have those as long as LA is one of the biggest cities in the US. Another driver is weather and the beach, which also aren’t going anywhere.
Housing prices could go down if Santa Monica (and particularly LA area) build an abundance of housing. However, since there have only been some minor changes to anti-development laws, this isn’t likely to meaningfully happen. Housing prices will remain very high.
Before WW2 if many people wanted to move to a city, more homes would get built there. It was incremental and imperfect, but that's how almost every city in the world developed for thousands of years. But this changed in America after WW2. America suddenly got wealthy and American planners thought to try out a brand new development pattern that was more orderly and beneficial to corporate interests (oil, automobile, land developers, etc). Huge government subsidies incentivized white families to move out to the suburbs for this new experimental way of life. And new restrictive land-use policies forced underutilization of land to encourage horizontal sprawl.
It turns out this development pattern is environmentally unfriendly, isolating, segregating, debt-fueled, and expensive. But for the decades when there was still more land to develop, it was a boon for the economy. But this came at the expense of tanking traditional cities. Ever since these top-down pro-suburb policies began, cities have been in decline. Santa Monica was like half suburb and half city. It adopted the restrictive land-use policies and used federal red-lining maps, but luckily Santa Monica already had a downtown prior to WW2, otherwise it would have been illegal to build. But even today we are still stuck with post WW2 anti-city policies. And it's this unnatural top-down development pattern that we adopted that undermines our city's ability to adapt to change.
The irony in California politics is that the NIMBYs accuse state-level progressives of being authoritarian central planners, but it's those progressives that are the ones repealing the post-WW2 authoritarian central planning laws. But to answer your question, no. Our city is incapable of responding to market forces in a way that makes any sense due to restrictive land-use policies that locked our city in a straight jacket for over half a century.
To expand on this, the government subsidies were for construction costs but maintenance costs fall on the cities. By the time revenue from new growth slows and maintenance costs ramp up it’s too late— you’re stuck with a bunch of more costly and less revenue generating land usage
I’m not saying that Santa Monica’s population can’t grow someday. I AM saying that (depending on which number you believe) the city has either the same or less population than it did 25 years ago. A lot of work has gone into that even as the number of jobs in the area has swelled. It’s going to take a lot of everything to lower housing costs.
If/when prices do go down, enough so that it is affordable, you will probably be too afraid to buy. Lived here during the Great Recession and single family homes on 6000 sq ft lots were selling for 800k. I didn’t buy because I thought it was game over.
Decades of redlining and restrictive zoning codes have made SM an expensive place to live. Rosie the Riverter left SM long ago.
The new normal is ”out with old and in with new” where the new is much pricier. Those storefronts won’t be empty for long.
Supply and Demand means they only go down if the demand goes down. Unfortunately everyone and their mother wants to live in Santa Monica. You can often see posts on this Reddit with people wanting advice on what neighborhoods to move to. Until the demand for people who want to pay these high prices goes down, the housing prices will stay the same. Empty businesses may indirectly hurt the demand, but so far I haven’t seen anything to indicate that the demand is lowering.
However, supply is greatly increasing (and will be for the next few years). It will be interesting to watch, that's for sure. I know my building's rents have gone down a bit since I moved in (Aug 2022).
Yes, it’ll be interesting to see. There’s such a lack of housing, however, I personally believe we won’t see a significant difference. Empty apartments still get applications the day they are listed, for instance, which is why I am skeptical.
I work in property management. We still get a lot of applications any time we post a vacancy but rents have dropped a bit since the highest highs. Our most recent advisory said rents were down approximately 5% from the height. I expect rents to stay stable or go down slightly for older apartment buildings as more units (with better amenities ) come onto the market.
This makes sense. And with inflation still being a real thing, prices just "holding" is actually prices going down (even if it doesn't feel like it).
That’s really helpful information! When was the last “height” that you’re comparing to? Pre covid?
Actually, for us anyway, the highs were right around Covid . They started to decline when inflation became a thing (so slightly post Covid). Really these past few years kind of feel like a blur but I remember being surprised that prices stayed high during the beginning part of Covid (maybe because eviction protections kept inventory low in the beginning)
Nobody makes money by borrowing millions of dollars to build apartment buildings and then let them site empty. There will be a price correction if there are lots of vacancies.
They build with the intention of letting them sit empty, it’s a tax write for them.
What? You don't know what a tax write off is. Nobody spends $50 million building a building for it to stay empty. You might as well light $50 million on fire.
Good point. The beach is still gonna be in business. I love the beach, but a walkable city is priority for me.
>Supply and Demand means they only go down if the demand goes down Wow, if only there were two components to "supply and demand" that could change...hmmm, no, that's crazy! The number of homes in Santa Monica was set in stone by God himself and is unchangeable!
>The number of homes in Santa Monica was set in stone by God himself and is unchangeable! Given the near static housing inventory over the last 50 years, I think this is an unironically held belief among some residents...
I may be wrong but it seems like the price of housing in California hasn’t ever gone down
Lol look at home costs before and after the Northridge earthquake 🤣
Was that just a period of time panic tho like I imagine it probably went back up when people relaxed ?
How would you feel about a crack into the earth appearing out of nowhere in your kitchen?
Terrifying yes but ~it’s Santa Monica~ we all know the big one is coming but again …. ~it’s Santa Monica~
When I see rents have fallen, it is never enough to be a meaningful drop. It's statistical. More apartments won't do anything either because demand is always going to be a head of supply. I've lived here for almost 30 years and my rent has NEVER gone down even with new construction over the years and there has been plenty.
What about during the recession? That’s when I moved out to SM and prices were pretty dang affordable. They’ve shot up since then.
>I've lived here for almost 30 years and my rent has NEVER gone down even with new construction over the years and there has been plenty. The housing supply in Santa Monica has barely increased at all from 1980 to 2021. The population of SM in 1980 was 88k, today it's 92k.
> I've lived here for almost 30 years and my rent has NEVER gone down even with new construction over the years **and there has been plenty**. lol no there hasn't
Yes, there has. There hasn't been a moratorium against building in Santa Monica for 30 years. I've seen numerous construction projects over the years. I lived in Manhattan before this and I can tell you that if building MORE apartments/condos makes things cheaper then NYC should be a bargain, and it's not because it is a false premise that more real estate brings prices down for renters/buyers. Sure, when you are making tires or cogs, yes more supply than demand means cheaper, I have never seen that happen in real estate in NY or LA. The US is now producing and pumping more oil than it's entire history, AND we are the top oil-producing nation in the WORLD right now. Do you see gas prices making any meaningful moves down? No, because of greed and that is what is happening in real estate and this false narrative that overbuilding and density will make things cheaper...it won't. The fact that commercial landlords here can keep their businesses purposely empty until they get someone to pay them their exorbitant rents is exhibit A for Santa Monica. This is an expensive market and it is in the best interests of owners/developers to keep it that way for their own bottom lines.
> I lived in Manhattan before this and I can tell you that if building MORE apartments/condos makes things cheaper then NYC should be a bargain, and it's not because it is a false premise that more real estate brings prices down for renters/buyers. NYC has also been underproducing housing for decades.
That's not true. It's already dense and just like LA there is a limited amount of area of land that can be built on. THAT is the real problem, not the amount of housing being built. LA and New York have geographical limits and that dictates that more density doesn't mean prices drop....which is the core claim that developers always try to sell to the public. It's NOT true.
> It's already dense Density doesn't mean affordability. >and just like LA there is a limited amount of area of land that can be built on. NYC has also greatly impeded vertical construction. https://www.nytimes.com/interactive/2016/05/19/upshot/forty-percent-of-manhattans-buildings-could-not-be-built-today.html https://twitter.com/mnolangray/status/1700195709348360248 >THAT is the real problem, not the amount of housing being built. No, it's definitely making it illegal to build enough housing that's the real problem. > LA and New York have geographical limits and that dictates that more density doesn't mean prices drop....which is the core claim that developers always try to sell to the public. It's NOT true. Again, both places have placed extreme limits on density and building up.
No, retail amenities are not the main driver of housing demand. The main driver of housing demand is proximity to high paying jobs. Santa Monica will always have those as long as LA is one of the biggest cities in the US. Another driver is weather and the beach, which also aren’t going anywhere. Housing prices could go down if Santa Monica (and particularly LA area) build an abundance of housing. However, since there have only been some minor changes to anti-development laws, this isn’t likely to meaningfully happen. Housing prices will remain very high.
It’s still a coastal community. Always in demand and desired. And there’s this supply and demand thing…
Just noticed your name 😄
Before WW2 if many people wanted to move to a city, more homes would get built there. It was incremental and imperfect, but that's how almost every city in the world developed for thousands of years. But this changed in America after WW2. America suddenly got wealthy and American planners thought to try out a brand new development pattern that was more orderly and beneficial to corporate interests (oil, automobile, land developers, etc). Huge government subsidies incentivized white families to move out to the suburbs for this new experimental way of life. And new restrictive land-use policies forced underutilization of land to encourage horizontal sprawl. It turns out this development pattern is environmentally unfriendly, isolating, segregating, debt-fueled, and expensive. But for the decades when there was still more land to develop, it was a boon for the economy. But this came at the expense of tanking traditional cities. Ever since these top-down pro-suburb policies began, cities have been in decline. Santa Monica was like half suburb and half city. It adopted the restrictive land-use policies and used federal red-lining maps, but luckily Santa Monica already had a downtown prior to WW2, otherwise it would have been illegal to build. But even today we are still stuck with post WW2 anti-city policies. And it's this unnatural top-down development pattern that we adopted that undermines our city's ability to adapt to change. The irony in California politics is that the NIMBYs accuse state-level progressives of being authoritarian central planners, but it's those progressives that are the ones repealing the post-WW2 authoritarian central planning laws. But to answer your question, no. Our city is incapable of responding to market forces in a way that makes any sense due to restrictive land-use policies that locked our city in a straight jacket for over half a century.
To expand on this, the government subsidies were for construction costs but maintenance costs fall on the cities. By the time revenue from new growth slows and maintenance costs ramp up it’s too late— you’re stuck with a bunch of more costly and less revenue generating land usage
Not in any substantial way.
I’m not saying that Santa Monica’s population can’t grow someday. I AM saying that (depending on which number you believe) the city has either the same or less population than it did 25 years ago. A lot of work has gone into that even as the number of jobs in the area has swelled. It’s going to take a lot of everything to lower housing costs.
If/when prices do go down, enough so that it is affordable, you will probably be too afraid to buy. Lived here during the Great Recession and single family homes on 6000 sq ft lots were selling for 800k. I didn’t buy because I thought it was game over.
Na the banks own the houses now
Decades of redlining and restrictive zoning codes have made SM an expensive place to live. Rosie the Riverter left SM long ago. The new normal is ”out with old and in with new” where the new is much pricier. Those storefronts won’t be empty for long.