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.   

Wednesday
Jan312018

2017 YEAR IN REVIEW ~ RIVIERA REAL ESTATE REPORT

2017 YEAR IN REVIEW  ~  RIVIERA REAL ESTATE REPORT

 One year ago I reported that 97 closed sales were the most that had been recorded in the Riviera within the last 10 years.  Furthermore, the median price had reached an all-time high of over $2 million.  Clearly 2016 was a benchmark year for the Riviera real estate market.  My prediction at that time was that this momentum would continue, and I can now report that this is exactly what happened as the final numbers for 2017 are also impressive.   The median price for the year was $1,925,000 which is actually about a 5% decrease from 2016, however the total number of sales hit a new high of 102!

 A closer look at the numbers illustrates why 2017 should be considered a banner year in the Riviera real estate market even though the median price did not keep pace with the previous year.  The biggest difference was that there was more activity in the lower end of the market in 2017.  The $1 - $2 million segment of the market produced 22% more sales along with 18% fewer sales in the $2 - $4 million range, however both years produced 5 sales in the lofty $4 million plus category.  Furthermore, the median price increase in 2016 was a bit skewed due to the abnormally large amount of sales in the higher end of the market that year.   The final median price in 2017 is still an impressive 17% above the level it reached just two years ago. Overall 2017 can best be described as a balanced yet robust real estate market characterized by a continuing increase in the number of sales combined with a sustainable level of appreciation.  

 At this time I don’t see any reason why 2018 will not continue on this path as long as the inventory levels remain healthy and sellers are realistic about the value of their homes.  There is no question that one of the reasons the number of sales declined in the $2 to $4 million segment last year was that many properties lingered on the market as the well-educated buyer pool did not chase overpriced listings.  The other potential wildcard in the Riviera market this year is that the demand may actually increase due to the recent fires and mudslides in Montecito.  Some of the people whose homes were damaged or destroyed have already purchased and/or are looking for homes in Santa Barbara.  This will be an interesting dynamic to keep our eye on as the year progresses.