First and foremost, we hope you are all staying safe and taking all the necessary precautions to protect your well-being during this rapidly changing situation. In times of uncertainty, one of the best things we can do to ease our fears is to educate ourselves with research, facts, and data. The below summary should give you a sense of that data, pulled directly from the Santa Barbara MLS, for the 1st quarter. While Real Estate has been deemed an essential business in Santa Barbara County, California's shelter-in-place order changed the way we live and do business. As a result, recent activity has stalled and the 1st quarter statistics were affected, but not as drastically as you would think.
SOUTH SANTA BARBARA COUNTY
Comparing the 1st quarter 2020 statistics to the previous year, South Santa Barbara County (Goleta through Carpinteria) experienced decline in inventory and sales activity. Inventory fell, and the number of active listings dipped 12% to 1,020. Number of escrows slipped 12% to 351 and sold volume sank 19% to $513 million. While there were several contracts cancelled in March as a direct result of the Covid-19 situation, surprisingly the number of sales only dipped 2% to 344. And of those sales, properties sold for 95% of their list price, up 3% from last year! While average sales price fell 17% to $1,490,983, median sales price rose 8% to $1,120,000.
1st quarter Montecito statistics showed a very different picture. Inventory rose 18%, with 271 active listings. Number of sales shot up 60% to 48 and number of escrows grew by 24% with 47 pending sales. Not surprisingly, some of those fell out of escrow and while the average price slipped 25% to $3,022,688, the median price rose 4% to $2,539,750. Due to the rise in sales activity, sold volume climbed 19% to $145 million. On average, listings in Montecito sold at 91% of their asking price, up 1% from last year. The strongest segment of the Montecito market in terms of sales, was the $2-4million price range, followed by the $6-8million range and we’re still seeing activity and buyer demand in those segments, despite the shelter in place order.
ULTRA HIGH-END MARKET
The ultra-high-end market was certainly the weakest segment during the 1st quarter, with 0 sales reported above $10 million compared to 7 sales the previous year. The highest sale during 1st quarter was in Santa Barbara at 3511 Sea Ledge Lane, for $8.3 million.
The 1st quarter Hope Ranch real estate market experienced fewer sales at lower prices. Compared to last year, housing supply dipped 12% to 38 active listings. Number of sales dropped 44% with 5 sales and the number of escrows sank 31% to 9 properties going under contract. Sold volume fell 65% to roughly $20 million. Average price fell 37% to $4,076,865 and median price slipped 10% to $3,900,000. Listings sold at 96% of their asking price, same as the previous year.
WHAT DOES THE REST OF 2020 HAVE IN STORE?
While there is a lot of speculation, nobody can truly predict the ramifications this crisis will have on the real estate market. For those who remember 2008, it's logical to wonder if the market is heading for trouble. However, the COVID-19 crisis is causing different challenges across the country than the ones we faced in 2008. Back then, we had a housing and mortgage crisis; today, we face a health crisis that has pushed the pause button on most of the economy. The data shows that prior to this health crisis, the real estate market was in a much stronger position than it was in 2008. Today, housing supply is low, and we don’t have enough homes on the market for the number of people who want to buy them. Today, housing appreciation is still below the lowest level we saw leading up to the 2008 crash. Today, 53.8% of homes across the country have at least 50% equity in their homes. Today, consumers are treating the equity in their homes much more conservatively. Today, mortgage lending standard remain tight unlike the housing crash when it was very easy to get approved for a mortgage.
Also, in past economic downturns, the impact was felt in similar ways across the country. With the uncertain spread of this virus, every city and state is responding in different ways. Likewise, we suspect the market impact nationally will be hyper local, varying for each city and even neighborhood. We are sharing and comparing information with other real estate agents across the country and we’re finding there is a collective optimism about the market rebounding fairly quickly.
We feel that once the shelter in place order is lifted, we will see even greater buyer demand for Santa Barbara and Montecito, particularly from urban areas, due to the safe and peaceful setting that our area offers. Those who had been considering a move here will be more inspired now than ever to do so, and those who work remotely, who can live anywhere in the world, will continue to flock to our slice of heaven.
Be safe and we look forward to seeing you soon. Please call us anytime 805-565-4014 or email at associates@marshakotlyar.
MK Real Estate Group, a luxury division
of Berkshire Hathaway Home Services California Properties