Year End Local Market Report
The Association would like to express their deepest sympathy to the families who have lost loved ones in the unspeakable flood tragedy. We also send our prayers and best wishes to those who were injured and the many people who lost their homes. For those who have been displaced, the Association has created a database of available rentals, which can be found on the Association's website, SBAOR.com. If you are a community member who has an available rental, please feel free to call the Association office at 963-3787 to add your rental to our database. Our sincerest appreciation to the tireless and courageous first responders... you are giving us our community back, one day at a time, thank you.
The charts on this page give the Santa Barbara South Coast market data for the month of December 2017, 2017 year-end statistics, as well as a historical look back to 2002 on the median price and the number of homes sold. The charts include all price ranges, from Carpinteria to Goleta and reflect market activity reported through the Multiple Listing Service.
The median price is defined as the midpoint in a grouping of sales, meaning half the sales in the group sold for more and half sold for less. In Table 1 you will see where 2017 ended with the median price at $1,250,000 for houses and PUDs. (A PUD is a unit within a planned unit development that is governed by a homeowners' association.) The 2017 year-end median is on par with levels seen at the previous market height, 2005 through 2007, and is a full 58 percent higher than the 2011 market low of $790,000.
The 2017 year-end median price for condominiums was $630,500, which, coincidentally, is also 58 percent higher than the low of $400,000 in 2012. However, the 2017 year-end median for condominiums is below the high point of $675,000 in 2005.
As one looks at the chart at the fluctuation in the median price over the past 15 years, one clearly sees the sharp appreciation of the early 2000's as well as the "down market" years of 2009 through 2012, which followed the so-called "financial meltdown" that spurred several years of short sales and foreclosures. Since 2013 the median price has climbed at a steady, and arguably more sustainable, pace.
Number of Sales
Referring to Table 2, a total of 1,179 houses and PUD's closed escrow in 2017, representing the fourth year in a row of increasing sales. Interestingly, for condominium sales, 2016 and 2017 saw a drop in activity over the height in 2015. At face value, this would suggest a drop in the number of first time buyers as the purchase of a condominium is frequently the first, more affordable, step on the homeownership ladder. However, a more likely reason for this market anomaly is the coming online of new condo developments, which sold briskly, but for the most part were not reported as sales through the MLS.
Looking back at the market activity over the past 15 years, you can see how the year-over-year cycles closely, but not exactly, mirror those for the median price. One interesting aspect in this chart is the sudden spike in number of sales for 2012. This is most likely where buyers, who had remained timid for several years, amid cascading distress sales, finally decided that prices were enticing enough to act. Referring back to Table 1, once can see how the dramatic uptick in sales activity for 2012 resulted in a 24 percent rebound in the median price the following year.
Months of Inventory
Table 3 shows that there were six months of inventory in December 2017. Months of inventory, often referred to as "market velocity," is a way of illustrating the current pace of sales by dividing the number of active listings by the number of properties in escrow, but not yet closed. This statistic is particularly useful in assessing buyer confidence today - whereas analyzing "sold" data reflects sales activity 45 to 60 days earlier. As a general rule of thumb, under three months of inventory is indicative of a strong sellers' market; three to six months of inventory is a more balanced market; six to nine months is a buyers' market; and over nine months could be viewed as a weak market.
For December 2017, with the lingering threat of the Thomas Fire, the number of pending sales was, understandably, down as much as 35 percent from what would have been anticipated. Moving forward, the greater Santa Barbara community will remain one of the most desirable places to live in the world. Buyers may delay their search for a home here in the near term, but previous markets and events have shown us that as time passes, delayed demand becomes pent-up demand.
As a community, we are entering a long term restoration and healing phase in which the members of the Association of REALTORS are committed to playing a key role. We wish our clients, and especially the community of Montecito, strength, resilience, and the love and support of family and friends for 2018.
Thank you to Jackie Walters of Village Properties for writing this article and sharing statistical information for SBAOR.
The source of this information and data is the Santa Barbara Multiple Listing Service. It is deemed to be reliable, and SBAOR has no reason to doubt its accuracy, but it is not guaranteed.