As of July 2026, the average 30-year fixed mortgage rate is around 6.6% (Freddie Mac PMMS). This single number feels particularly significant in high-priced markets like Santa Monica. As the loan amount increases, the impact of a 1 percentage point difference in interest rates on monthly payments also grows.

Looking at price trends, the past year has been closer to a gradual decline. According to Redfin, the median sale price in June 2026 was $1,636,609, down 1.7% from a year ago, while Zillow's ZHVI shows the average home value at $1,697,753, a decrease of 1.3%. However, this drop is not substantial, suggesting that the market is not collapsing but rather taking a breather in a high-interest environment.

This is a favorable point, but the situation can vary depending on the type of property, which can be a concern. Single-family homes are selling in an average of 31 days and are trading at about 100.08% of the asking price, indicating a strong seller's market, while condos take an average of 46 days and offer more room for buyers.

Inventory levels are around 4.2 to 4.4 months, which is relatively ample compared to other coastal cities in California. If you have the same budget, it seems slightly more advantageous to look for negotiation opportunities in condos rather than single-family homes.

Schools under the Santa Monica-Malibu Unified School District are often mentioned as areas of interest for Korean families. However, since school district boundaries frequently change at the address level, it's advisable to check the assigned school for the specific address before purchasing.

From an investor's perspective, the strong rental demand supported by tourism and office needs is a plus, but many areas show low cap rates. A balanced approach would involve focusing on long-term holdings for capital gains and reviewing local ordinances related to short-term rentals.

Families moving from other states should be aware that property tax reassessment methods and rental regulations may differ significantly from their previous state. Especially for landlords, it's wise to check California's tenant protection laws based on county standards.

The leverage ratio can also be a deciding factor between two options. For buyers with significant loans, the monthly payment burden at a rate of around 6.6% is high, while those using less debt face a larger initial cash burden. Which option is more favorable depends on the holding period and cash availability.

From a rental income perspective, Santa Monica tends to have lower cap rates. While the returns may seem disappointing if approached solely from rental income, considering the potential for capital gains and short-term rental opportunities based on tourism demand can present a different picture. However, short-term rentals are subject to city-specific regulations, so it's safer to check relevant ordinances before establishing a revenue model.

Vacancy risks and maintenance costs are also aspects that can be easily overlooked. Particularly in areas with many older buildings, it's advisable to budget generously for structural inspection costs before purchasing.

Calculating based on a rate of around 6.6%, the larger the loan amount, the greater the proportion of interest in the monthly payment. In the initial years, interest payments will dominate over principal repayments, so entering the market with a focus solely on short-term capital gains is especially risky in a high-interest environment like the current one.

When comparing owner-occupancy and investment purposes, owner-occupants tend to prioritize school districts and commuting distances, while investors focus on rental demand and cap rates. The attractiveness of the same property can vary depending on which criteria are considered.

Ultimately, Santa Monica can appear as a completely different market depending on whether one leans towards single-family homes or condos, and whether the focus is on owner-occupancy or investment. It seems more advantageous to evaluate both options side by side and make decisions based on budget and objectives. This article does not constitute investment or legal advice, and it is recommended to consult with professionals before finalizing any contracts.