For those of you who read real estate report on a regular basis, you will know that the Riviera real estate market has been on a torrid pace for the last 2 to 3 years. The number of sales hit an all-time high in 2016 only to be surpassed last year, and the median price has been creeping up on the $2 million plateau. After analyzing the numbers from the first 6 months of 2018 I can enthusiastically report that the pace of sales is definitely continuing, however the median price escalation has taken a bit of a breather so far this year.
My first reaction to the new median price of $1,745,000 – a 10 percent declined from last year – was surprise combined with a bit of disappointment. Once I analyzed the various price segments, however, I immediately understood the underlying reason for this. The most encouraging news is that the number of sales overall is on a pace to surpass last year’s record number. The main driver of this market strength is the $1- to $2-million category, which is even more robust than it has been the last 2 years. The $2- to $3-million segment remains solid with 16 sales – essentially the same as the last 2 years. The big change is that there has been only 2 sales so far in the $3 million plus range and none above $3.5 million. For whatever reason this is a trend in the overall South Coast real estate market currently, however, the expectation is that the higher end sales will begin to heat up as we approach the late summer and fall season.
In my January report I commented that “the other potential wild card in the Riviera market this year is that the demand may actually increase due to the recent fires and mudslides in Montecito.” Since that time the sub-market that has been the most positively impacted from the added demand is Hope Ranch, however, the Riviera market has seen far less of an effect. I am aware of a few Riviera sales that have occurred as a result of Montecito residents being displaced, but the general consensus is that it will take more time for those impacted to make decisions about their future. My expectation is for a strong second half of the year. Hopefully the inventory will continue to flow at the lower and mid-range segment of the market and the combination of increased motivation and stronger demand will revive the high-end sales.
Read the original report here.
Top image: 1425 Alameda Padre Serra, Santa Barbara, CA 93103 / courtesy of Chris Palme