2004: The Year in Review
2004 was another booming year for local real estate. Statistics for all categories looked strong: the number of sales rose 6%; median prices increased 24%; and average prices soared 29%.
2004 was particularly strong for estate properties. The number of million dollar properties that sold jumped 44% to a record 950. There were 48 residential sales above $5 million, compared to 10 in 2003 (an increase of 380%!!!) The strength of the estate market helped raise the average sale along the South Coast to a staggering $1,318,349.
Current Market Condition
2005 has started out with a bang! Once again we are experiencing strong Buyer demand and a shortage of quality inventory. The properties that are selling are frequently attracting multiple offers, allowing the Sellers to obtain top dollar and strong terms. In one of my multiple-offer sales last year the winning Buyer wired the entire purchase price in to escrow before presenting the offer, and closed the transaction in 5 days!
Interest rates, although slightly higher than last year, are still very attractive. Lenders are offering a wide variety of products to meet Buyer needs. Any future upward movement in rates may slow activity in lower priced properties, but should not adversely affect estate properties.
Expectations for 2005
2005 is going to be another record-breaking year for prices along the South Coast. The estate market should be especially strong. Demand for our area will continue to benefit from the huge generation of Baby Boomers who are in their peak income producing and inheriting years. We are seeing more and more Buyers, who have the ability to live anywhere in the world, choosing Santa Barbara – the American Riviera – for permanent and vacation homes.
Despite strong demand, I anticipate the number of sales to decline this year, due to the limited selection of available properties. However, average prices should post double-digit increases again this year, with luxury home markets like Montecito and beach properties performing in the 20%+ range.