Thursday
Feb072019

2018 YEAR IN REVIEW ~ RIVIERA REAL ESTATE REPORT

2018 YEAR IN REVIEW ~ RIVIERA REAL ESTATE REPORT

The Riviera real estate market in 2018 can best be described as a continuation of strong demand and a healthy number of  sales combined with a sustained cap on price appreciation.  The similarities in the level of sales over last 3 years are almost uncanny, as the total number of homes sold in all three years have been in the 100 +/- range.  However, the median price continues to fall short of its peak in 2016 of $2,025,000 – it dropped 5% in 2017 and an additional 2% last year finishing at a still robust $1,880,000.

Upon a more detailed analysis of the various price categories, it is apparent that the only significant difference between 2017 and 2018 is that there were fewer high-end sales.  The lower and mid-range segments remained very healthy with 6 fewer sales in the $1 to $2 million category and 6 more sales in the $2 to $3 million range.  There were 7 sales between $3 to $4 million, which was identical to 2017, however only 1 sale above $4 million compared to 5 the previous yearHaving represented properties in every segment of the market in 2018 I can attest to the fact that there is a good balance in the marketplace currently.  For the most part, buyers seem to be very well educated and are not chasing overpriced listings.  Conversely, they are aggressively pursuing properties that are priced to sell in all segments of the market.  Two of my listings that received the most attention last year were a lower Riviera fixer that got bid up from a list price of $1,050,000 to a selling price of $1,250,000 and a spectacular home at the top of the Riviera that was one of the highest sales of the year at $3,450,000.

I have high expectations for the Riviera market in 2019.  Due to the slight shift that we have experienced from a market favoring sellers to one that is more balanced, there will be some pressure on sellers to price their properties competitively.  This will result in a further strengthening in the overall number of sales along with a more dynamic market in which homes are selling relatively quickly.  Additionally, there are some early signs that the high-end will return to the levels seen a few years ago.  As of this writing in the first week of February there has already been 3 closed sales over $3,000,000 and there are 3 listings currently under contract between $3,000,000 and $5,000,000.  Finally, I expect that we will experience a bit more demand on the Riviera this year as those affected by the 2018 Montecito mudslides make a final decision on whether to rebuild or relocate to another desirable location. 

Tuesday
Jul032018

2018 FIRST HALF ~ RIVIERA REAL ESTATE REPORT

2018 FIRST HALF  ~  RIVIERA REAL ESTATE REPORT

 

 For those of you who read this semi-annual report on a regular basis, you will know that the Riviera real estate market has been on a torrid pace for the last 2 to 3 years.  The number of sales hit an all-time high in 2016 only to be surpassed last year, and the median price has been creeping up on the $2 million plateau.  After analyzing the numbers from the first 6 months of 2018 I can enthusiastically report that the pace of sales is definitely continuing, however the median price escalation has taken a bit of a breather so far this year. 

My first reaction to the new median price of $1,745,000 – a 10% declined from last year – was surprise combined with a bit of disappointment.  Once I analyzed the various price segments, however, I immediately understood the underlying reason for this.  The most encouraging news is that the number of sales overall is on a pace to surpass last year’s record number.  The main driver of this market strength is the $1 to $2 mil category which is even more robust than it has been the last 2 years.  The $2 to $3 mil segment remains solid with 16 sales – essentially the same as the last 2 years.  The big change is that there has been only 2 sales so far in the $3 mil plus range and none above $3.5 mil.  For whatever reason this is a trend in the overall South Coast real estate market currently, however the expectation is that the higher end sales will begin to heat up as we approach the late summer and fall season. 

In my January report I commented that “the other potential wild card in the Riviera market this year is that the demand may actually increase due to the recent fires and mudslides in Montecito.”  Since that time the sub-market that has been the most positively impacted from the added demand is Hope Ranch, however the Riviera market has seen far less of an effect.  I am aware of a few Riviera sales that have occurred as a result of Montecito residents being displaced, but the general consensus is that it will take more time for those impacted to make decisions about their future.  My expectation is for a strong second half of the year.  Hopefully the inventory will continue to flow at the lower and mid-range segment of the market and the combination of increased motivation and stronger demand will revive the high-end sales….stay tuned.