Tuesday
Jul112017

2017 FIRST HALF ~ RIVIERA REAL ESTATE REPORT

2017 FIRST HALF  ~  RIVIERA REAL ESTATE REPORT

 I reported 6 months ago in the 2016  Year In Review article that “the Riviera was the best performing sub-market in the entire Santa Barbara south coast”.  After analyzing the numbers from the first 6 months of this year it is apparent that the Riviera market is still very robust.  While the median price of $1,975,000 has not changed from the first half of 2016, the number of sales in each price category is almost identical.  This indicates that the market is continuing on its torrid pace in terms of the number of sales, however the healthy balance between buyers and sellers is alleviating pressure on prices in either direction.

 As of this writing the current inventory also looks promising with 47 active listings, about one third of which are under contract with a median list price of $2,195,000.  If this pace continues the Riviera market could surpass last year’s record setting numbers of 97 sales with a median price of just over $2 million.  In order for this to happen however, it is imperative that the flow of inventory continues and that sellers do not have unrealistic expectations when it comes to pricing their homes.  Another interesting statistic to take note of is the amount of time it takes for properties to go under contract after coming on the market.  The average “days on market” for the listings that sold in the first 6 months was 47 compared to 56 for the overall South Coast market.  A more detailed analysis illustrates that the properties at or below the 47 day mark sold for very close to the list price, whereas those that were on the market for a longer period of time underwent substantial price reductions before they finally sold.  This is an excellent case study for potential sellers to analyze before setting a list price for their property.

 One final note of interest is the trend that I mentioned in last year’s report regarding the resurgence of the home renovation market. The five highest sales so far this year were all either new construction or thoroughly renovated high quality homes ranging in price from $3.4 to $6.6 million.  I personally witnessed the strong demand for this type of property, as one of the developers was my client who built a beautiful contemporary home on the lower Riviera.  Not only did this sale set a precedent for the neighborhood at $3.4 million but it went under contract while it was still under construction and closed escrow the day it was finished. While being a developer in Santa Barbara is not for the faint of heart it can be a rewarding endeavor due to the lack of quality new construction in an established neighborhood like the Riviera. 

Thursday
Jan052017

2016 YEAR IN REVIEW ~ RIVIERA REAL ESTATE REPORT

2016 YEAR IN REVIEW  ~  RIVIERA REAL ESTATE REPORT

 As you may recall from my mid-year review in July, I suggested that the Riviera was “the best performing sub-market in the entire Santa Barbara south coast” and I expected the pace to slow down in the second half.  While it did slow down a bit after the early summer months, the final numbers for the Riviera real estate market in 2016 confirm that it was a record setting year.  There were a total of 97 closed sales in 2016 which is the most per annum within the last 10 years, and the median price of $2,025,000 not only surpassed the peak year of 2007 but was an astounding 21% above the previous year.

 When compared to the median price of the overall Santa Barbara south coast market which increased about 5% from 2015 and is still below the 2007 peak, there is no question that the Riviera was the best performing sub-market in the region.  The main reason for the Riviera’s record setting year was that there were significantly more sales in the higher price ranges.  Compared to 2015 the number of sales in the $1 - $2mil range was about on par, however there were 40% more sales in the $2 - $3mil range and 43% more sales above $3mil.  It will be interesting to see if this trend continues in 2017.  The median price of the current inventory is nearly $3mil, however there are only 2 pending sales currently above $2mil.  This suggests that the appetite for the higher price homes has been subdued for the past few months, but the upcoming Spring market will be the true test for how the 2017 market will fare.

 Speaking of 2017, my prediction at this time is that it should be another strong year in the Riviera real estate market.  The exuberance in the financial markets that we have witnessed since the election should bode well for Santa Barbara real estate—especially in the higher price ranges.  Rising interest rates may suppress demand a bit in the lower price ranges, but I don’t expect that to have much of an effect in the Riviera market.  In order for the momentum of the record setting 2016 market to continue it is imperative that the flow of inventory continues at a solid pace and more importantly that the sellers are realistic about the value of their homes.  Let’s keep the momentum going!