2016 Will Be Another Good Year
Homes in California continue to appreciate each year, although the rate of appreciation is slowing down—a sign of a stable market. There was a big increase in home values of 27 percent in 2013, and then a 10 percent increase in 2014.
In 2015 the rate went down to a 6.5 percent increase. The California Association of Realtors predicts the rate will rise by 3.2 percent for 2016.
This long-term trend shows strong stability of real estate prices, without an expectation of either sharp rises or sharp drops. There are some exceptions. Silicon Valley and San Francisco, with their runaway creation of new high-tech jobs, had 10-20 percent increases for 2015. After several boom and bust cycles, a stable real estate market can be viewed as a good thing.
Because interest rates are rising for the ﬁ rst time in eight years, more buyers will enter the market as fence-sitters decide that now is the time to buy. Only about 25 percent of our South Coast sales are ﬁ rst-time home buyers, whereas the national average is between 30 and 40 percent. We simply do not have enough lower-priced homes to accomodate all of the ﬁrst-time buyers.
The wild cards that could affect the market negatively are: stock market volatility; slower growth, especially in China; further collapse in energy/commodity prices; geo-political tensions; terrorism; El Nino/water shortage; and, the 2016 Presidential election.
Presidental elections generally cause a slowdown in sales since some people delay making big decisions until after the election. Nonetheless, I expect plenty of high end sales in 93109 and an inﬂ ux of out-of-town buyers, especially from the Bay Area. While it may not be a banner year, expect steady growth in 2016.
Mesa Year End Wrap-up
The leading neighborhood in home sales in Santa Barbara for 2015 was the Mesa. Median house prices in 93109 were up 11.2 percent from 2014 to 2015. The second highest neighborhood was Goleta—up 7.4 percent, and third was Montecito—up 5.5 percent. I attribute the higher prices on the Mesa to increased market value for
near-water properties. This is in line with near-water property increases in Montecito, Carpinteria and many Southern California beach communities.
In the Multiple Listing Service, overall South Coast prices were down a percent or two from 2014. This statistical drop in price I attribute to more lower-priced homes, and fewer higher- priced homes selling, rather than an actual drop in price. The number of homes sold in Montecito dropped by nearly 30 homes from last year.
The average time on the market for a Mesa home was 33 days compared to an average of 77 days in Montecito, and 51 days for the overall market. Mesa prices have ﬁ nally achieved a match for those at the top of the market in 2005/6. Some South
Coast locations still have 5 to 20 percent of catching up before they equal the market peaks of a decade ago.
The highest 93109 sale of the year was a 3,538 square foot, 3-bed, 3-bath, plus 2 half baths home on Sea Ledge Lane for $7.8 million. It was right next to Hope Ranch on 1.12 ocean front acres. On the Mesa itself, the highest sale was a 4-bed 5-bath home on La Vista Del Oceano with an acre, a pool, and a view overlooking the whole coastline that sold for $5.3 million. The lowest price house sale was a 3-bed, 2-bath home on Flora Vista for $765,000. The highest price condo was a 3-bed, 3-bath on Vista De La Playa for $1.8 million and the lowest was a one bedroom in the Santa Barbara Highlands for $410,000.
Mesa condos did as well as the houses and South Coast condo prices were up 3.5 percent. However, condo statistics are skewed upwards by nearly 150 units of new condos sold in 2015.
On the Mesa there were 6 closings in the past 30 days with 9 pending sales in escrow. That is compared to 6 closings in the previous 30 days with 7 pending. These are lower numbers than previous months, and a market slowdown in December is normal, but the demand for Mesa homes remains strong.
“Scott had an excellent knowledge of our area and accurately put a realistic value on our house. His marketing plan worked perfectly. We had a buyer within 10 days. He is very detail oriented. We would recommend him to others in our area.”
– Richard and Mona Ford
“Scott has been nothing short of phenomenal. This is my 3rd time engaging him to buy or sell a home. I would highly recommend Scott to anyone looking to buy or sell a house.”
– Saad and Rashda Khan