South Coast Home Prices Tick Upward

A single, majestic property selling for $16.5 million put Hope Ranch on the statistical real estate map for May 2018; the sale was the largest home sale in the county and single-handedly created a 50 percent gain over the previous May’s sales in Hope Ranch, according to research firm Core Logic. In human terms, however, sales agents described something of a migration from Montecito to Hope Ranch early this year, due to both the reality of rebuilding after the disaster and a need to be housed somewhere more permanent.

The trend is quieting, however. Seventeen homes sold in Montecito last month, the largest number all year as Montecitans seem to be choosing to stay in their community. Even a home in hard-hit Riven Rock sold last week for $4 million, said one longtime agent. Interestingly, median prices dropped, from $3.2 million in May 2017 (25 homes sold) to $2.7 million this May, but the average price rose from $3.5 million to $4.1 million, according to County Recorder’s Office statistics.

But statistics don’t tell the entire story. They come raw from the county Assessor and Recorder’s offices and also the Realtor association’s multiple listings service. Brokers and title agents comb them for the real story on off-market sales and gaps between county records and the scene on the ground.

This month was an interesting one, said Jennifer LeMert, sales and marketing manager at Fidelity National Title insurance company. For instance, some homes listed as single-family residences were actually condos under one roof — as on Del Playa in Isla Vista — details she learned by talking with the agents involved in the sales. These subtleties are the bread and butter of Realtors like Dianne and Brianna Johnson at Village Properties, who compile LeMert’s statistics at their blog as a monthly market report. According to their stats, median single-family home prices peaked this March for the City of Santa Barbara at $1.4 million, which Dianne Johnson pointed out is a number easily skewed by a single large sale, and just as easily skewed by off-the-market sales — some developers are using in-house brokers — and below-market private sales.

Just as it has for rentals, the housing market for purchase has tightened. In mid June, about 550 houses and condos were listed for sale on the South Coast. Comparatively, said Stan Tabler, a broker with Compass, the numbers from a decade ago were between 734 and 1,026 homes for sale.

Goleta, Tabler noted, is a seller’s market. The city had 56 active listings as of June 15, he wrote in his blog, 33 of which were in escrow. The remaining 23 properties translate to a 1.7-month supply for buyers. In realtor economics, a six-month supply is considered a balanced market, Tabler said. Price hikes reflected the tight market in Goleta, rising 32 percent from May 2017 to May 2018, from $664,000 to $877,000. The least-expensive home sold in May, however, was a condo in Goleta for $325,000.

In Santa Barbara, median home prices hit a new, historic high for May — $1.17 million — a rise of 15 percent over the previous May. Simultaneously, in terms of homes available for sale, Santa Barbara is at a low 2.8-month supply for June, said Tabler.

Several real estate agents commented that this year’s tax changes might surprise buyers. The new federal tax law allows only $10,000 of property tax (which are part of state and local taxes) to be deductible, rather than all, as before. While the new owner of the Hope Ranch property on Roble Drive might not notice the inability to deduct all the $180,000 tax on the $16.5 million purchase, the homeowner of a “middle” $3.5 million property might feel a lot of the $38,000 tax bite.