Greetings and happy 2010! Nationwide, low interest rates and federal tax credits for first-time buyers helped stabilize the real estate market in most parts of the country. However, many western states, including California, continued to suffer, and locally 2009 was another tough year for real estate.
2009 vs. 2008 in Review
On a positive note, inventory levels declined 3% along the South Coast as sales increased 9%. However, prices continued to slide, as the median price dropped 17% to $707,500 and average prices plummeted 27% to $1,076,360. Hardest hit was the high end market, where the overall trend of lower inventory and increased sales was reversed. In Montecito, inventory levels increased 5% and sales declined 20%. Median prices slipped 29% to $2,045,000 and average prices fell 23% to $3,122,216. Total sales volume along the South Coast declined over $346 million – Montecito sales volume alone fell over $280 million.
Despite these bleak statistics, 2009 actually finished on a strong note and 4th quarter figures show significant improvement. For the entire South Coast, the number of active listings fell 11% while the number of sales soared 43% compared to the 4th quarter of 2008. Median and average sales prices both declined, but overall sales volume climbed 28%. In Montecito, active listings were almost unchanged, but the number of sales rose 24%!
Expectations for 2010
Mortgage interest rates should stay low. The real estate recovery is too fragile and too dependent on low interest rates to allow any significant increase. We should see increased sales in the second quarter of the year as Buyers scramble to take advantage of available tax credits, currently scheduled to expire April 30, 2010. The luxury market should see an overall increase in the number of sales for 2010. This absorption of inventory will lead to a stabilization of prices.
P.S. Despite difficult market conditions, I had 29 pending and closed sales for 2009, totaling over $106 million. If you would like to sell your property, call me at 565-4896 to discuss the personalized marketing and advertising I can provide to get your property sold! All calls will be confidential.