“People
who
already
own
homes
are
less
likely
to
be
buyers
right
now
because
they
are

holding
onto
their
properties
because
of

low
interest
rates,”
Joe
Cilic,
the
team
lead
of
the

Sotheby’s
International
Realty-brokered

Cilic
Group,
said.

The
influx
of
first-time
buyers
in
the
Santa
Monica
housing
market
has
resulted
in
frequent

bidding
wars
on
lower
price
point
properties.

“At
the
lower
price
points,
they
are
pretty
common,”
Cilic
said
of
multiple
offer
situations.
“I’m
selling
a
condo
right
now
that
has
multiple
offers,
but
especially
in
single
family,
if
something
comes
on
at
that
entry
level
price
point,
people
will
snatch
it
up
and
there
will
be
a
bidding
war.”

Data
from


Altos
Research
supports
Cilic’s
claim
that
lower
priced
homes
are
being
snatched
up.
As
of
May
13,
the
median
days
on
market
for
single-family
properties
in
Santa
Monica
with
a
median
price
of
$1.85
million
(the
lowest
market
segment)
and
a
median
price
of
$2.622
million
was
35
days
and
17
days,
respectively.
For
the
higher
two
market
segments,
the
median
days
on
market
jumps
to
59
days
and
87
days.

While
agents
are
happy
to
see
first-time
buyers
in
the
market,
it
has
also
resulted
in
more
complications
getting
a
transaction
to
the
closing
table.

“All
of
the
first-time
buyers
are
a
lot
of
the
reason
why
things
are
falling
out
of
escrow
—
being
a
backup
offer
is
a
good
position
to
be
in
our
market
right
now,”
Levin
said.
“These
first-time
buyers
have
a
different
mindset
than
where
the
market
was
three
years
ago.
That
$1
million
purchase
is
no
joke
anymore
and
they
are
weighing
their
monthly
payment
with
their
rent,
whereas
before
it
was
a
no-brainer.”

But
it
isn’t
just
first-time
buyers.
Across
all
market
segments,
Levin
said
buyers
are
more
cautious
than
they
were
a
few
years
ago.

“They
spook
easier.
If
something
comes
up
on
inspection
that
wasn’t
a
big
deal
when
interest
rates
were
closer
to
3%,
now
it
is
more
magnified
and
pushes
them
out
the
door
a
lot
quicker,”
Levin
said.

In
addition
to
making
buyers
more
prudent
in
their
purchases,
local
real
estate
professionals
also
say
interest
rates
are
to
blame
for
the
area’s
lack
of

inventory.

As
on
May
10,
inventory
in
Santa
Monica
had
a
90-day
average
of
just
55
active
single-family
listings,
up
from
an
all-time
low
of
32
set
in
April
of
2022,
but
still
below
the
roughly
70
single
family
listings
reported
in
May
2019,
according
to
data
from
Altos
Research.

In
the

Greater
Los
Angeles
metro
area,
which
includes
Santa
Monica,
as
well
as
cities
like
Irvine
and
Pasadena,
Altos
data
shows
that
there
was
a
90-day
average
of
just
6,712
active
single
family
listings
in
the
area
as
of
early
May.
In
comparison,
in
May
of
2019,
there
were
nearly
15,000
active
single-family
listings.

“Those
who
locked
into
those
3%
interest
rates
on
their
houses
are
not
quite
motivated
to
sell
and
trade
into
something
with
these
higher
interest
rates,”
Levin
said.
“They
are
looking
at
the
monthly
payment
and
it
just
doesn’t
make
sense.
So
what
was
already
a
tight
market
is
now
even
tighter.”

Cilic
added
that
some
would-be
sellers
are
choosing
to
become
landlords
instead,
renting
out
their
properties
with
3%
interest
rates.

“They
are
capitalizing
on
the
spread
between
what
they
are
paying
for
their
mortgage
and
what
they
can
lease
for
because
they
are
locked
into
low
interest
rates,”
Cilic
said.

Long
term,
Cilic
believes
that
many
of
these
properties
will
come
back
onto
the
market,
as
their
owners
are
typically
not
interested
in
being
long
term
landlords,
which
would
eventually
adding
a
much-needed
boost
in
inventory.

In
the
meantime,
however,
real
estate
pros
believe
inventory
will
remain
tight,
but
that
the
market
will
remain
relatively
fluid.

“I
just
hope
we
can
get
through
the
year
at
the
same
pace
we
are
at
now,”
Charlee
Nessel,
one
half
of
the

Berkshire
Hathaway
HomeServices
California
Properties–brokered
Dan
&
Charlee
Nessel
team,
said.
“We
are
focused
on
just
taking
it
one
client
at
a
time.
There
really
isn’t
a
sense
of
urgency
in
the
market.
It
feels
much
slower
paced
than
it
was,
but
it
is
very
steady.
I’ve
been
in
the
business
for
over
25
years
and
whenever
there
is
a
pullback,
like
was
saw
in
2023,
there
is
always
a
massive
tidal
wave
of
business
right
after,
so
I
am
working
on
prepping
for
that,
which
I’m
expecting
in
the
next
couple
of
years.”