1st Quarter 2014
2013 in Review
Greetings and Happy 2014!
Along the South Coast in 2013, real estate "came in like a lion, and went out like a lamb." The booming market during the first half of the year lost momentum, and finished flat. The same cooling trend occurred in Southern California, and throughout many parts of the nation, as sales declined and prices flattened. "Home Sales are hurt by higher mortgage interest rates, constrained inventory and continuing tight credit," according to the National Association of Realtors.
In the Santa Barbara area, despite gains of 5% in Average Sales Price to $1,184,502, and gains of 19% in Median Sales Price to $800,000, total Sold Volume only increased 1% to $2,319,254,103, due to a 4% decline in the Number Sold, at 1,958.
The really great news, both locally and nationwide, is that the increase in home values during 2012 and 2013 created a record rebound in home equity—nationwide, homeowners' equity soared $2.2 trillion from the 3rd quarter of 2012 to the 3rd quarter of 2013. This increase in value, and equity, has significantly diminished the presence and impact of distressed sales (short sales and foreclosures). In Southern California, distressed sales are currently about 19% of the resale market—that is down from about 42% a year ago, and down from the peak of 56.4% in 2009.
4th Quarter 2013
The 4th quarter of 2013 was not nearly as robust as the previous year. Although Average Sales Price rose 21% to $1,302,591, and Median Sale Price jumped 28% to $849,000, most of those gains occurred during the first half of the year. Total Sold Volume dropped 14% to $554,903,819, as the Number Sold plummeted 29% to 426. This was due in large part to a lack of inventory of homes for sale—New Listings were down 23% to 415.
Lack of inventory of homes for sale is the big story in Montecito. For 2013, the number of New Listings declined 18% to 400, and Active Listings declined 15% to 569. We simply need more selection of homes for sale to maintain a healthy real estate market. The soaring increase of 25% in Median Sale Price to $2,250,00 was offset by a 1% decline in Average Sale Price to $2,971,765, and a 15% drop in Number Sold to 257. Overall Sold Volume slid 16% to $763,743,785.
There were ten sales at, or above $10,000,000; 1405 Sea Meadow Pl.: $10,000,000; 810 Cima del Mundo: $10,307,500; 338 Toro Canyon Rd.: $10,600,000; 875 Knollwood Dr.: $12,500,000; 780 Ashley Rd.: $12,800,000; 1453 Bonnymede Dr.: $13,500,000; 1518 East Mountain Dr.: $14,400,000; 888 Lilac Dr.: $14,625,000; 757 Riven Rock Rd.: $16,715,000; and 2840 Hidden Valley Ln.: $26,500,000.
There are currently six Active Listings in Birnam Wood, ranging in price from $2,100,000 to $4,250,000. There were nine Closed Sales in 2013: 2091 Stratford Place: $2,438,000; 2029 Boundary Drive: $2,463,019; 2117 Forge Road: $2,575,000; 535 McLean Lane: $2,600,00; 1931 Boundary Drive: $2,750,000; 1975 Inverness Lane: $2,850,000; 513 Crocker Sperry Drive: $2,850,000; 537 Las Fuentes: $4,200,000; and 2060 Birnam Wood Drive: $4,395,000. There are two Pending Sales: 2000 Sandy Place and 2118 Birnam Wood Drive.
Predictions for 2014
Compared to this time last year, interest rates have risen from 3.3% to 4.5%—an increase of over 35% in one year. This has had, and will continue to have, a cooling effect on real estate. Conversely, the stock market is well above 16,000. This has created tremendous wealth in our country, and my expectation is that wealthy Buyers will continue to shop locally for both primary and vacation homes. Changes in interest rates will have more of an impact in the lower end of our market—changes in stock market wealth will have more impact on the upper end of the market. According to the National Association of Realtors, a "modest growth in values is expected in 2014."
Director, Estates Division
Berkshire Hathaway HomeServices
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