First Quarter, 2003
2002 was an interesting year for Montecito real estate. Median sales price rose
11% to $1,500,000. The number of sales for the year rose 33% to 310. Yet despite
the rise in the number of sales and median price, the average price declined 11% to
2,060,543. What is going on out there?
Actually, it’s not that hard to explain. Throughout the South Coast, attractive interest rates benefited lower priced properties more than higher priced properties. For Buyers of more expensive homes, the sputtering stock market and anemic overall economy were more important considerations than interest rates. Buyers for high-end properties became more cautious and patient. Yet, Sellers (and/or agents) remained overly ambitious with asking prices. This caused inventory levels to increase in most price ranges, especially in the 1.5 – 4.5 million-dollar category.
The year ended with a noticeable gap between Buyer and Seller expectations relating to value. There are still plenty of Buyers out there- they are just more concerned about value now.
I will be writing for the California Economic Project again this year. My next newsletter will be a copy of that article with a more detailed analysis of 2002 and some predictions for this year.