MARKET UPDATE

On a national level existing home sales slowed for the fourth consecutive month in July, except in the West. 

In our local market, after the awful events in December and January, which did adversely impact sales in January and February, total sales activity for the year has remained similar to 2017.  Montecito continues to be down for the year, but the rest of South County is up.

Given that interest rates have increased, property tax deductibility has been reduced, and the median price has continued to rise, the sales results year to date are somewhat surprising.  

The combination of these increased costs means home ownership locally is more expensive this year than last – more monthly income is spent on housing.  If you are purchasing a $1M home today and financing 80% of the purchase price based on today’s 30 year fixed rate mortgage, you are paying $429 more a month in a mortgage payment and quite probably more in taxes, than this time last year.

Sales keeping pace with 2017 is remarkable considering the pressures pushing against it.

Some changes we are observing this year.  We’ve noted a rise in active listings this Summer a significant contributor is a large amount of new construction coming onto the market. There are currently five new developments under construction. It appears the able and willing buyer pool is not growing as fast as the available inventory. This year we have also noted more price adjustments on listed properties, often times aggressive price reductions, and we seem to be noticing more deals falling out of escrow. 

Could we be transitioning from a market that has favored the Seller to a more balanced market? Perhaps. Currently if you are a Buyer, you might now be in a better position to negotiate on more properties than in the recent past.

It’s tough to accurately predict the future direction of the market. We don’t foresee a dramatic, sudden change in the market in the short term, but the market may be changing.

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THE HIGH & LOW

Highest Sale of the Month  /  4410 Via Esperanza, Hope Ranch  /  $10,900,000

Lowest Home Sale of the Month  /  5 N Soledad St, Santa Barbara  /  $675,000

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JULY 2018 STATISTICS

Year to Date

Total Sales – 1,016 in ’18 vs. 1,039 in ’17 – DOWN 2.2%

Median Home Sales Price – $1,200,000 in ‘18 vs. $1,200,000 in ’17 – EVEN

Median Condo Sales Price – $680,000 in ’18 vs. $600,000 in ’17 – UP 13%

Sales Above $5M – 19 in ’18 vs. 31 in ’17 – DOWN 39%

August

Total Sales – 161 in ’18 vs. 151 in ’17 – UP 7%

Total Escrows – 133 in ’18 vs. 147 in ’17 – DOWN 9.5%

Avg. 30 Year Fixed Rate Mortgage – 4.62% as of 8/23/18

*All data is pulled from the MLS & public records

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