Santa Monica is known for its high-end market, especially due to its proximity to the beach, but there are significant price differences depending on the neighborhood within the city. From my long-term observation of this market, I will highlight three areas.

North of Montana is considered one of the top residential areas in Santa Monica, with single-family home prices ranging from $3.5 million to $4.5 million. The inventory is quite scarce, leading to a more gradual price movement compared to other areas.

Sunset Park is a neighborhood with good school districts and many families, with prices forming between $1.8 million and $2.2 million, while Ocean Park, thanks to its proximity to the beach, shows a price range of $2.2 million to $2.6 million.

In contrast, the eastern area near Pico is primarily condos, trading in the range of $900,000 to $1.1 million, making it relatively more accessible within Santa Monica.

Price trends indicate that North of Montana and Ocean Park have recently maintained a gentle stabilization, while the condo market near Pico seems to be experiencing slight adjustments. From an investment perspective, there is a perception that the area near Pico is relatively undervalued, making it worth watching.

In terms of rental yield, condos near Pico tend to show relatively high returns in the upper 3 percent range, while top-tier single-family home areas like North of Montana drop to the low 1 percent to just above 2 percent, which is quite low. It's also important to consider that Santa Monica has strong rent control regulations.

Risks include the high entry prices, which make the market sensitive to interest rate changes and economic trends, as well as the potential impact of commercial vacancy issues on residential market sentiment.

For Korean households, many approach the market from an asset allocation perspective rather than for primary residence, and I often see individuals entering from relatively less burdensome areas like condos near Pico.