Now at the half year mark of 2017, there does not seem to be anything that would hamper the progression of our real estate market. It’s not “on fire” but it has been an active market all year. There was concern that the political uncertainty could stall different markets but it has apparently not negatively affected the stock market or real estate.
The graph below shows a 15-year history of the number of houses (single family homes and Planned Unit Developments) and condominiums that have sold year to date between Carpinteria and Goleta. The number of sales for houses indicates that the market has been quite active this year. Our area has not seen extensive building of houses in the last few years, so this does not reflect new home sales.
With regard to condos, the number of sales this year appears fairly average. But the figure of 201 for this year does not represent sales in a new, large development, which has closed escrow on over 100 properties in the last six months. If those were added in, the total would be over 306 which would be a record breaker compared to the last 18 years.
The median price, as indicated in the graph below, is a form of measurement or a “mathematical result” that indicates that half of the homes sold are above this price and half are below. This does not represent any one property or group of properties, geographically or by price range.
The median price for houses in our area is still moving up at a steady pace. It is doing a gradual increase of around 5% from a year ago. That represents a healthy increase. If the market continues on its current path, we will probably see a new high this year in median price, which will surpass the last time we hit the “height of the market” back in 2007.
The median price for condos has actually dipped down a bit. Remember that this does not take into consideration the new 100+ condos that have sold at The Village of Los Carneros. The median for condos would probably be much higher if those were added. (The Village of Los Carneros are being built and sold by a private developer and they are not required to include these in our MLS if they so choose.)
In the chart below, information for houses is broken down by areas within the south coast. Looking at the year-to-date information by area is interesting but how does it compare to last year? As indicated above, there were more closed escrows overall this year than last, so it would be assumed that each area had more sales this year. For the most part, that is true except Montecito had 7 fewer sales this year than last — 83 compared to 90. And where the other areas showed a marked increase in the median, Montecito’s median price is down about 6% compared to last year.
When we look at the monthly information for June, overall there were a few more sales this year than last — 114 compared to 103. The difference of 11 sales pending is not concentrated in any specific area but conversely to closed sales, Montecito has nine more sales pending this year compared to last year.
The number of active listings is comparable to last year’s count. Two of the areas that stand out as far as differences are Santa Barbara and again, Montecito. Santa Barbara has 139 active listings now but last year there were 170; a decrease of 31. Montecito has 150 actives now but last year there were 131, an increase of 19.
The Months of Inventory (MOI) is an interesting number to watch. This indicates roughly how long it would take to sell all of the current active listings without adding additional inventory. The overall for houses is currently at 3.7. This reflects that we are in that active, steady market. When the number is between 0 and 3, the market is favoring the seller. If the number is between 4 and 6, we have a steady, normal market. Anything over that, then the market is favoring buyers. Goleta Valley and Santa Barbara are both seeing a lot of activity.
The MOI for condos is 2.8. These tend to be the “starter homes” for many first-time home buyers and step-down homes for empty nesters and the condo market remains strong.
Under the column for Median Sales Price in June, as a rule, these numbers can swing much higher or lower than the year-to-date figure primarily because it has a much smaller sample to review. For example, Hope Ranch had four closed sales in June with a median of $2,595,000 which is actually lower than its year-to-date median price. Conversely Montecito’s monthly median is $4.2M where its year-to-date is $2,980,000 — a difference of over $1,000,000.
As a matter of information, the following table compares the number of all closed sales of houses for the first six months of the year, by sold price range.
The Under $1M range has the fastest selling properties. These have typically been the more “affordable” houses, with price ranges above the average condominium. The range of $1M – $2M appears to be our most active market in sales. These are typically the “neighborhood” houses that have a high appeal. Over $2M would be considered our luxury inventory that ranges across all of the Santa Barbara areas.
Fewer properties are coming on the market under $1,000,000. Generally, they have very short days on market and usually close escrow within 30-45 days. The $1M – $2M range as stated above is the most active. But with the increase in the median price, some of those properties are testing the market by going into the $2M – $4M range.
Regarding new listings this year, there is a reduction in the number of new listings for houses by about 5% compared to last year. It’s even more dire for condos in which there were over 17% fewer new listings this year than last. If we continue to have fewer new listings, this could negatively affect our inventory by not providing a variety of properties for buyers to see and potentially purchase. We will be watching this trend.
The real estate market continues to thrive. The U.S. economy is still on the upswing and should only help our market. What could negatively affect us is any international incident, major upheaval with our government, or catastrophic natural disasters.
There are always people who need or want to sell, and we still have a great pool of buyers anxious to buy in our lovely area. If you or someone you know is thinking of selling, buyers are anxious to see the new listings coming on the market. Be sure to contact your Village REALTOR® who can guide you through the process.
A huge thank you to Carol Kruckenberg of Village Properties for this very informative article. Information in this report is based on data provided by the Santa Barbara Multiple Listing Service and is deemed to be reliable but not guaranteed.