SBAOR: South Coast Real Estate Market Update

Santa Barbara Board of Realtors South Coast Real Estate Market Update Second Quarter 2020

As one might imagine, with the unfolding impacts of Covid-19, real estate sales activity for the Santa Barbara South Coast for the first two quarters of 2020 has seen some dramatic shifts.

The Santa Barbara Board of Realtors is here to support our community during these unprecedented and challenging times. Our hearts go out to local families and businesses directly impacted by the pandemic. For those who wish to buy or sell real estate, our members are ready to help under safe and carefully crafted protocols in order to best protect all involved in the real estate sales process.

Market Summary Year-To-Date

The year began with strong sales activity fueled by a strong economy and ongoing low interest rates. When the country, and our local community, began to grapple with the ramifications of dealing with the virus, sales activity went from bewilderment and paralysis in March and April to, astonishingly, a robust sellers’ market by May and June. Pending sales for homes and PUDs for the month of June 2020 were up three times the number for April 2020; 149 versus 50. By comparison, we saw 103 pending sales for the month of June 2019, showing a significant jump in demand year-over-year.

As you can see, the local real estate market is one sector of our local economy where a “V-shaped” recovery has taken hold. Since the Stay at Home Order was eased, we have seen a surge in out-of-town buyers coming to the Santa Barbara area seeking a smaller community environment for their families. There has been increased appeal for compound-type properties and “extended-family” floor plans. Privacy, space and rural settings are also in high demand.

Looking closely at the data, you will see how this rollercoaster of a market has now settled in at a somewhat astonishing pace. The chart gives a breakdown of activity per neighborhood as well as the year-to-date median price and months of inventory. The current low month of inventory numbers will almost certainly result in a higher median price as the year unfolds.

Median Sales Price

For houses and PUDs market-wide, all communities from Carpinteria to Goleta, the median sales price is flat from one year ago; $1,288,500 as of the end of June versus $1,290,00 one year ago. Look for that number to creep up as the year unfolds. The big winner in the median price category is Montecito. As of the end of June, Montecito’s median price was $3,250,000, up 14% from one year ago. What we are calling the “Montecito surge” is a result of a large number of higher-end Los Angeles and Bay Area buyers deciding to not delay their dream of a home here. There have been many cases of buyers coming to town, viewing a handful of homes, picking one and closing with cash in less than 30 days. Their strong preference is for turn-key homes, to allow for their move to happen sooner rather than later.

The median price for the city of Santa Barbara, at $1,236,000, is actually down very slightly from one year ago, but we do expect that number to move upward as the months unfold. Going back many years, the Goleta market has been “the Santa Barbara South Coast canary in the coal mine” for South Coast market 2020 MLS Market Activity trends. (That market was the first to signal distress and foreclosures coming 2020 Year-to-Date June 2020 out of the 2008 financial crisis.) The Goleta median Closed Escrows Median Sales Price Sales Pending Active Listings Months of Inventory Closed Escrows price at the end of June at $1,055,000 is up 7% from Houses/PUDs 452 $ 1,288,500 149 285 1.9 108 a year ago, indicating marCarp/Summerland 36 $ 1,092,000 12 30 2.5 12 ket strength in a mostly Montecito 87 $3,250,000 34 107 3.1 24 entry-level housing comSanta Barbara 204 $ 1,236,000 63 94 1.5 43 munity, which in turn, will Hope Ranch 12 $3,312,500 5 18 3.6 4 impact the higher price Goleta 113 $ 1,055,000 35 36 1.0 25 ranges across the South Condos 145 $681,692 53 102 1.9 33 Coast. The smaller comTotals 597 $ 1,150,000 202 387 1.9 141 munities of Carpinteria and Summerland show a decrease in their median price and higher-end Hope Ranch is showing a slight increase. Condos

Median Sales Price

$1,245,000

$1,040,000 $4,146,950 $1,300,000 $2,511,250 $950,000

$620,000 $1,115,000

Months of Inventory

The months of inventory statistic provides an excellent snapshot of current buyer confidence and today’s pulse of the market. It compares the number of pending sales to the available inventory, whereas sold data will reflect market activity from up to two months previously. To define this statistic further, months of inventory represents the absorption of the available properties. A lower number shows properties are selling as fast or faster than new listings coming on the market.

Looking at the chart, you will see today’s strong activity is clearly reflected. Again, across our market, the winner is Montecito, for the most dramatic change in that statistic, year-over-year. At the end of June this year, Montecito had only 3.1 months of inventory, as compared to 8.9 a year ago. I personally do not recall, going back many years, that low of a month of inventory number for Montecito. To illustrate further, at Montecito’s three months of inventory, there are approximately three sellers for every one buyer, (this of course will vary according to price range) — as compared to a year ago where on average, each seller was competing with eight other sellers for that one buyer.

Months of inventory for Santa Barbara and Goleta are 1.5 and 1.0 respectively. This is solid sellers’ market territory. Priced at market value, a seller can expect their home to sell within the first four to six weeks. Along with this swift market a buyer will often be facing multiple offer situations, which is never a fun place to be. Consult your Realtor for strategies in having your offer stand out from the rest under those circumstances.

Current days on market, for the entire market is 65. This number varies greatly, depending, of course, on location and price range. For properties priced at under $1 million, days on market is well under one month. As far as list price to sales price percentage, again, heavily determined by location and price, this currently stands at 95%, this is the list price at the time of sale, after any price reductions.

The condo market, providing a starting point for many first time home buyers, is also showing solid strength. The median price is up 4.3% from one year ago.

We are in uncertain times. Owning your own home, or buying an investment property, can be one of the safest long term investments and is most often the largest part of someone’s overall net worth. Take advantage of today’s historically low interest rates and ask your Realtor to help you discover opportunities in the market for you. Most importantly, stay safe and healthy.

Jackie Walters is a licensed agent with Village Properties. License #00835438. Jackie has been an active agent for over 30 years and she can be reached at 805-570-0558 or jackie@villagesite.com.

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