October 29th, 2019
What’s happening in our local real estate market? Comparing the 3rd quarter 2019 statistics (July through September) to the previous year, South Santa Barbara County (Goleta through Carpinteria) statistics showed improvements in most segments. The number of sales inched up 2% (454) while the number of escrows grew 8% (484). Inventory remained unchanged with 1,339 active listings. Prices appreciated: average price grew 13% to $1,619,315 and median sales price grew 8%, to $1,050,000. Sold volume experienced a 16% gain over last year, to just over $735 million. Time on the market is relatively unchanged, with cumulative days on market (CDOM) averaging 64 days compared to 60 days this time last year. On average, properties sold at 96% of their asking price, up 1% from last year.
The luxury market was slightly less active than last year, with 4 sales above $10 million, compared to 5 sales during Q3 2018. The beach remains the hottest segment of the luxury market with the two highest sales in South Santa Barbara County selling along the beach, at 3443 Padaro Lane, which sold for $23,000,000 and 3447 Padaro Lane, closing at $15,050,000.
3rd quarter Montecito statistics showed we are back to pre-mudslide figures. Compared to last year’s deflated numbers, inventory grew 33% to 341 active listings. Sales are way up: number of sales rose 37% to 56 closings, number of escrows shot up 50% to 69, and sold volume grew 28% to approximately $219 million. Although average sales price dipped 7% to $3,919,117, median sales price rose 18% to $3,325,000. Despite the optimistic activity, listings took substantially longer to sell, with CDOM averaging 110 days, about a month longer than this time last year. Properties sold at 94% of their asking price, up 2% from last year. Interesting to note that while all these figures show a rise over 2018 statistics, they represent almost the exact same figures we saw during 3rd quarter 2017.
Montecito Q3 stats show we are back to pre-mudslide figures and number of sales are up nearly 40% over last year!
Pricing is key! Those properties that are accurately priced are seeing positive results.
Hope Ranch remains a very desirable choice, however the market continues to cool as summer activity was average at best. Housing inventory rose 7% with 47 active listings in the marketplace, yet sales activity was tempered. Number of sales dropped 10% to 9 closed transactions. The high end was hampered with only one sale above $5 million during 3rd quarter, at 4163 Marina Drive closing for $6,625,000. Average price dropped 26% to $3,587,523, whereas the median price grew 20% to $3,638,854. On average, listings sold at 93% of their asking price, and time on the market more than doubled, averaging 142 days compared to 65 days last year.
Hope Ranch market cooled from last year, particularly in the high end, but still remains above pre-mudslide statistics and median price grew 20% to $3,638,854.
Properties are taking longer to sell: Average time on the market is up in almost every neighborhood, with Hope Ranch leading the pack at 142 days.
Nationally, a hot stock market is pumping capital into the economy. The construction industry is booming. Mortgage rates continue to fall, making financing at higher price points more attractive. While home purchases by foreigners have dropped significantly, demand from Americans is rising. Lack of housing inventory continues to stall sales that could be happening.
Statewide, NAR reported that CA home prices rose 7.9% last year and believe home prices will rise another 5-7% this year. Cities with the highest reported price growth are Los Angeles, Santa Barbara, Tehama, Yuba, Merced, Santa Cruz, and San Bernardino. The Bay Area is getting hit the hardest, with its lowest performance since 2010. Trump’s tax plan is having implications for California residents and many are changing their primary residence to other tax friendly states.
Predictions...we are hearing the word “recession” much more lately. An important thing to keep in mind is the fundamental imbalances we saw in the 2006 real estate market are simply not around today. And while 2020 was forecasted as the year of the next market collapse by many economists, that forecast was based on traditional cycle periods and the US economy appears to be doing better than expected. Additionally, the market upswing during this housing cycle has been much more temperate - we did not see the same kind of growth rate as the last market trends. While the market is spotty, all these factors may keep the real estate market from dipping much in the coming years.
Stay tuned for our next quarterly market update in January 2020, where we will summarize the 2019 yearly real estate statistics.