Santa Barbara South Coast First Quarter Update 2018
Happy Spring 2018! What a year we have had so far. So much has happened it feels more like it should be summer by now. We are all a bit (or more) traumatized by the local events in Montecito and trying to grasp some normality. The interesting thing is that the Real Estate market is acting like nothing ever happened and it’s business as usual. There is still historically low inventory in homes and condos in our area. The properties that come out are getting multiple offers if they are priced right and in good condition including staging. If you look below at the increase in Median Sales Price it’s a large number for condos and homes. However, last year’s first quarter was unusually low which I explained then as being due to the upper end being very soft. That’s changing. Many Montecito folks bought right after the disaster. The numbers below reflect that.
We are still seeing good activity in Montecito which makes up about 15% of our sales. In 2017, 46 homes and condos closed the first quarter vs 2018 which saw 31 closings, a 33% drop. We do have sellers coming on the market in Montecito who are buying Hope Ranch and higher end Santa Barbara Homes. Some are wanting a second home due to evacuations so they are buying condos and others want to be out of “danger” and have discovered that Santa Barbara has great areas to live in. In actual numbers there are approximately 4,000 homes in Montecito of which 401 (around 10%) were damaged or destroyed. Many folks have not decided what they will do next. There is a slight increase in inventory in Montecito but it’s not what some expected. I just sold a listing of mine, which is located in a red zone, at 99% of its asking price. This property was listed right before the fire and then sat because there was no access due to cleanup and fears of more problems. Then suddenly in March there was a lot of interest and we got an all cash buyer who thinks now is the time to buy in Montecito!
One thing that is driving this surge of activity is the interest rate hike to 4.6%. The forecast is for 3 more rate hikes this year so many buyers are getting off the fence NOW and buying. I don’t expect huge appreciation for the year, maybe around 3-6% depending on the area even with this low inventory. The affordability decreases with every rate hike so demand could go down. But as the wonderful saying goes “People come here for the beauty but stay for the community.” Just ask Montecito!
HOMES & PUDS
|Median Sales Price||$1394000||$1181683||$1300000||+18%|
|Median Sales Price||$670000||$575000||$637000||+16.5%|
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