Nationally, the 1st quarter real estate market was generally spirited. Stock market growth coupled with steady employment rise spurred significant interest in buying. The shortage of inventory (down 6% from last year) led to home sales improving 5%, and median prices rising 6%. Despite mortgage rates being roughly 17% higher than they were last year, buyers were undeterred. However, these hot markets could be significantly disrupted if the Federal Reserve raises interest rates another 3 times, like they say they will. This would negatively affect buyer’s purchasing power and housing affordability.
The South Santa Barbara County market activity experienced a rise in inventory and sales but at reduced prices. Inventory levels rose 7%, with 1,126 total active listings. The number of sales grew 6% to 357 sales, as did the number of listings going under contract, which followed at 6%. However, the average sales price fell 13% to $1,356,512 and the median price dipped 7% to $899,000. As a result to the decline in prices, sold volume slipped 8% $484,274,846. Listings sold at 95% of their asking price, the same as this time last year.
The first quarter Montecito statistics were somewhat disappointing. Despite inventory levels rising 8%, with 264 total active listings, there were only 36 sales in Montecito (a 39% percent drop). This decline was related to weak escrow activity in Q4 2016, attributable to uncertainty regarding the U.S. presidential election. The number of listings going into escrow also slipped, down 24% to 44. The long-overdue and much-needed rains really dampened showing activity. There were 9 sales above $5 million and only one sale above $10 million. Average sales price dipped 17% to $3,458,416 and median sales price fell 21% to $2,750,250. As a result, sold volume sank 49% to $124,502,994. Listings in Montecito sold at 91% of their asking price, down 3% from last year.
The Hope Ranch picture was similar to the south coast. There was an increase in inventory, up 59% to 46 total active listings. There were 9 sales during the first quarter, compared to only 4 the previous year. The increase in sales led to a rise in sold volume, growing 31% to $27,851,500. The number of listings going into escrow also grew, with 9 new escrows in the first quarter, compared to only 4 last year. However, despite the uptick in activity, both average and median sales price fell (42% to $3,095,611, and 52% to $2,742,500 respectively). Listings in Hope Ranch sold at 95% of their asking price, compared to 88% last year.
Even though potential wildcards like changes in tax policies and interest rate hikes lurk over any market forecast, most national economists are predicting 2017 will be another strong year and even experience improvements. Our local market is so weather dependent that a series of strong rains can severely crush activity. Luckily, these heavy rains helped fill our reservoirs over 50% full. And as a result, effective immediately, the Montecito Water District just suspended penalties for excessive water consumption. This could have a very positive impact on our estate market as the brown lawns of the glorious estates become green and lush again. I anticipate an improvement in sales during the 2nd quarter Spring selling season over the 1st quarter. Stay tuned for my next quarterly update in July where I will summarize the 2nd quarter statistcs.
Marsha Kotlyar Real Estate Group
Looking for Positive Results in a Tough Market?
We closed over $50 million in sales in 2016 and have already closed $22 Million in 2017, placing us as one of the top real estate teams in the Santa Barbara MLS! Our listings sell on average at 98% of their asking price, 3% higher than the current MLS average If you are thinking of selling, contact us at 805.565.4014 or Associates@MarshaKotlyar.com for a complimentary consultation about your property.