Third Quarter, 2006
The statistics for the first half of 2006 show a market in transition. Despite inventory levels rising dramatically, the number of sales is down in every community in South Santa Barbara County. Overall, sales are down over 26% compared to 2005. The hardest hit segment of the market has been condominiums and entry-level homes.
As interest rates continue to rise, the market for properties under $1 million will continue to soften. Inventory levels for entry-level homes have increased sharply since the start of the year. Prices are softening, fewer properties are selling, and those that do are taking considerably longer.
In contrast to the significant decline in the number of sales, average and median prices rose in every area along the South Coast! Median prices rose about 5% to $1,062,500 and average prices climbed 10% to $1,768,394, both new highs.
The outlook for the estate market continues to be extremely positive. Montecito median and average sale prices rose to $2,372,273 and $3,370,348 respectively- both new records. Demand continues to significantly exceed supply, and there have been a tremendous number of sales above $10 million, and several above $20 million. This trend is echoed in other premium areas throughout the country. A recent Wall Street Journal article states “homes on the ultra high end of the price scale…have been selling in increasing numbers.”
I expect the market for estate properties to continue to be strong as “quality of life” Buyers continue to appreciate our beautiful community.