Tuesday
Jul222014

2014 FIRST HALF ~ RIVIERA REAL ESTATE REPORT

2014 FIRST HALF ~ SANTA BARBARA RIVIERA REAL ESTATE REPORT

 

The general message from the first half of this year is that the steady rebound in appreciation that we have enjoyed for the last two years is continuing.  The median price for the first six months of 2014 was $1,700,000 which is a 10% increase from last year and now represents a substantial 21% rebound from the low point of the “great recession”  just 2 ½ years ago.  Additionally, the pace of sales and the level of inventory have both accelerated substantially after a relatively quiet first quarter of the year.

 The biggest reason for the continued price appreciation is that the inventory of homes in the low end of the market has declined and the pace of sales in the higher end has increased.  To illustrate this in more detail, last year there were 10 sales under $1 million in the Rivera and surrounding areas that I track whereas this year there have only been 2 sales in this category.  On the other end of the spectrum, there were only 3 sales over $3 million in 2013 and this year there has already been 5 sales in the high end including 2 sales above $4.5 million.  The other contributing factor is that the inventory of homes for sale has increased substantially within the past few months.   In fact, there were nearly 3 times as many sales in the second quarter than in the first primarily due to the increased availability of homes on the market.

 As I was writing this column six months ago the inventory of homes for sale was quite low and there was little indication that this trend was going to change.  Consequently it was difficult to predict what the 2014 market had in store because there simply wasn’t enough inventory to satisfy the demand.  I can now report with confidence that the market should continue on its current path of strong sales activity and steady appreciation due to the more balanced level of supply and demand that is currently taking place.  We are starting to witness a subsiding of the appreciation rate which I suspect will continue through the end of the year.  With this in mind I would caution potential sellers about the strategy of waiting for home values to increase further before putting their home on the market. 

Wednesday
Jan082014

2013 YEAR IN REVIEW ~ RIVIERA REAL ESTATE

2013 YEAR IN REVIEW ~ SANTA BARBARA RIVIERA REAL ESTATE REPORT

 

Similar to the south coast Santa Barbara real estate market as a whole, the Riviera market experienced a healthy year of sales and strong appreciation growth in 2013.  Last year I reported that Riviera home prices had finally turned the corner after 5 years of decline with a small yet positive 2% increase from the prior year.  The upward trend in price appreciation gained quite a bit of steam this year with a final median price of $1,540,000 representing a significant 12% increase from 2012.

 A further analysis of the sales data shows that there were 3 times as many sales in the sub-million category in 2012 compared with 2013, however there were fewer sales above $2 million in 2013.  This suggests that the majority of the appreciation occurred in the lower priced segment of the market.  Furthermore, all of the appreciation occurred in the first half of the year as the final median price was essentially the same as it was at the half way point.   In retrospect, there were two factors that caused this significant decline in momentum after the first six months.  First of all, fewer homes came on the market in the second half.   Secondly, many of those that did come on the market were priced well above market value due to sellers wanting to take advantage of the first true “seller’s market” that we have experienced in many years. 

 Looking forward to 2014, it is not apparent that the price appreciation will continue unless the two factors mentioned above are reversed.  The current inventory of homes for sale is extremely low, and many of the available properties have been lingering on the market due to the disconnect between the list prices and reality.  I know that the demand side of the equation is still very strong, as I continually get requests from other agents with their buyers’ needs for Riviera properties in various price ranges.  I am certain that another healthy year of Riviera sales is in store as long as the supply of appropriately priced homes materializes to satisfy those buyers that are ready and anxious to buy.

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