In the July report I commented on the significant change that occurred between the first and second quarter of this year, as the Santa Barbara real estate market shifted from an extreme sellers’ market to one with more balance. Now that I have analyzed the third quarter numbers it is apparent that this trend is continuing, however there may be an adjustment on the horizon.
There were 21 sales with a median price of $3,450,000 in the Riviera/El Cielito/Eucalyptus Hill neighborhoods recorded in the third quarter. While the median price increased a modest 6% from the second quarter, the number of sales was almost identical. The market is still exhibiting signs of strong demand, as 7 of the 21 properties sold quickly and got bid up in price. However, nearly half of the homes sold below the list price and were on the market an average of about 40 days. Currently there are mixed signals in the marketplace. Some of the listings are still going under contract very quickly, but the majority are lingering on the market and requiring price reductions to generate interest. Of the 10 currently active listings in these neighborhoods, 7 have been reduced in price and available for an average of 75 days.
At this point it is difficult to predict where the Santa Barbara real estate market is heading. The continuing lack of homes for sale is a trend that has been in place for quite a while and probably will continue for the foreseeable future. This bodes well for sellers, as the demand for Riviera homes and estates continues to be strong. While we are still experiencing a sellers’ market, the key to success in the current environment is pricing. As mentioned above the homes that are priced competitively and marketed aggressively are performing well.