1st Quarter 2018
Nationwide
Nationwide, the real estate market for 2017 can be easily summarized: strong Buyer demand (fueled by a booming stock market and continuous job gains), and low inventory levels, continued to push prices upward in 2017. Prices are now about 6% above the previous 2006, pre-crash peak.
However, new changes in the tax laws may slow that momentum. The overall structure of the final tax bill at the end of 2017 diminishes important tax benefits of homeownership. Mortgage Interest Deduction is now limited to loan amounts of $750,000 for new loans taken out after 12/14/17 (current loans of up to $1,000,000 are grandfathered). Deduction for property taxes was previously unlimited, but is now capped at a maximum $10,000, and is “an itemized deduction of up to $10,000 for the total of state and local property taxes and income or sales taxes”.
How will these changes affect our area? According to the National Association of Realtors “some local markets, particularly in high cost, higher tax areas, will likely see price declines as a result of the legislation’s new restrictions on the mortgage interest and state and local taxes”. Simply put, the cost of homeownership in our area is now higher.
Santa Barbara - South Coast
Overall, 2017 was a positive year for local real estate. Although we had a decline in inventory, sales improved, and prices increased. Inventory shortages accelerated during the fourth quarter, but we ended the year with Total Active Listings only down 5% to 2867. Despite limited supply, sales rose 5% as the Number Sold climbed to 1859. Average Sale Price jumped 7% to $1,468,394. Median Sale Price increased 6% to $1,000,000 (eclipsing the previous record of $980,000 set in 2006). Between the increases in both sales and prices, Sold Volume jumped 13% to $2,729,744,773. On average, properties sold for 96% of their last asking price. The largest sale along the South Coast during 2017 was 3271 Padaro Lane for $21,750,000.
Montecito
2017 was a mixed year for Montecito real estate. Inventory levels inched up 2% as Total Active Listings reached 542. Despite a slowdown at the end of the year, overall, sales improved as the Number Sold increased 4% to 231. Median Sale Price climbed an impressive 7% to $2,800,000. However, due to a lack of sales of larger, estate properties (there were only two Montecito sales above $10 million in 2017), Average Sale Price slid 2% to $3,316,253. Overall, Sold Volume improved 1% to $766,054,444. On average, properties in Montecito sold for 92% of their last list price – that is a decline of 2% compared to 2016. The largest sale in Montecito during 2017 was 985 Hot Springs Road for $15,925,000.
Birnam Wood Golf Club
There are presently four Active MLS Listings in Birnam Wood Golf Club: 2129 Forge Road - $4,485,000; 534 Las Fuentes Drive - $5,650,000; 2085 Birnam Wood Drive - $5,650,000; and, 514 Las Fuentes Drive - $9,495,0000. There was one closed sale during the third quarter: 511 Las Fuentes Drive – sold for $4,900,000. There are currently no MLS Pending Sales in Birnam Wood.
San Roque / Upper East
Activity in San Roque/ the Upper East (MLS Area 15) was very consistent with the nationwide market in 2017: Inventory levels declined substantially, and prices increased.
Total Active Listings slid 11% to 697. Despite the significant reduction in inventory, the Number Sold only fell 1% to 473. Average Sale Price rose 6% to $1,400,716, and Median Sale Price jumped 11% to $1,230,000. Overall, Sold Volume increased 4% to $662,539,090. On average, properties in MLS Area 15 sold for 97% of their last list price – an improvement of 1% compared to 2016. The largest sale in MLS Area 15 in 2017 was 1041 Mission Ridge Road for $6,592,500.
Mesa/ Samarkand
Activity for Samarkand/ The Mesa (MLS Area 20) was mixed for 2017. Despite a decrease in inventory levels and a strong increase in sales, prices slid. Total Active Listings fell 5% to 529. Sales were particularly robust as the Number Sold jumped 12% to 378. However, Average Sale Price inched down to $1,081,573, and Median Sale Price moved downward 1% to $935,000. Overall Sold Volume climbed 12% to $408,834,746. On average, properties in MLS Area 20 sold for 98% of their last list price – that is an increase of 1% compared to 2016. The largest sale in MLS Area 20 during 2017 was 647 Sea Ranch Drive for $4,075,000.
Santa Barbara/Goleta North
Activity in the Santa Barbara Foothills and Goleta North (MLS Area 35) was more consistent during the third quarter of 2017 than in any other area along the South Coast. Total Active Listings were unchanged at 170. The Number Sold was also unchanged at 80. Average Sale Price slid 1% to $871,929, while Median Sale Price rose 4% to $802,500. Overall, Sold Volume was almost unchanged at $69,754,390. On average, properties in MLS Area 35 sold for 98% of their last list price – identical to the same time period last year
Hope Ranch
Improved selection in Hope Ranch (MLS Area 25) in 2017 led to substantially increased sales activity. Total Active Listings rose 11% to 95. Sales climbed more in MLS Area 25 than any other area as the Number Sold skyrocketed 82% to 42. Despite strong sales, prices were soft, as Median Sale Price fell 8% to $2,625,000. Average Sale Price improved slightly to $3,390,569 thanks to two of the largest sales along the South Coast during 2017: 4621 Via Roblada at $10,010,000; and 4305 Marina Drive at $17,087,500. Overall, Sold Volume jumped 87% to $142,403,900. On average, properties in MLS Area 25 sold for 90% of their last list price – a decline of 3% compared to 2016.
Sincerely,
Daniel Encell
Director, Estates Division
Berkshire Hathaway HomeServices
(805) 565-4896
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