What I thought would be interesting for this analysis would be to look at October ’08 vs. October ’07 for the Home Estate/PUD and Condo markets of Santa Barbara Real Estate including Carpinteria Real Estate/Summerland Real Estate, Montecito Real Estate, downtown Santa Barbara Real Estate, Hope Ranch Real Estate and Goleta Real Estate. In October ’07 we were just coming to grips with the Sub Prime mortgage problem and in October ’08 we were staring down the barrel of a potential financial meltdown.
For October ’07 there were 61 Home Estate/PUD sales for the area and in October ’08 that number was more than 70. So far so good, but last year the median sales price in October was $1,325,000 and this year we’re looking at a number that’s below $900,000 and closer to $850,000. Now this doesn’t mean that $1.325 million house is now worth about $450,000 less, but it does mean that somewhere around and below $900,000 is where most of the sales are occurring.
Looking a little deeper into the numbers we see that in ’07 there were 63 Home Estates that went pending and in ’08 there were around 70. Again, so far so good but the median list price for those 63 homes in ’07 which was $1,025,000 is a lot closer to the median list price of those approximately 70 homes that went pending in October ’08. The pending properties for this October are about $150,000 below the pending properties in October of last year.
The median sales price bounces around a lot from month to month and for the last 12 months we had a high of about $1.3 million in February and a previous low of about $940,000 in July but when you put all that together it still gives us a median sales price of right around $1 million for the year.
For October ’07 139 new Home Estate/PUD listings came on the market with a median list price of $1,175,000 and for October ’08 there were about 130 new listings. But now here is where it gets interesting. The median list price of those approximately 130 new listings this year is about $1,250,000 or about $75,000 higher than the median list price of last year. This means that the median sales price has dropped by about $450,000 and the median list price has gone up about $75,000. That’s about a half million dollar difference between what’s for sale and what’s selling.
The gap gets even wider when you look at the overall inventory for the area which consists of fewer than 600 Homes and see that those properties have a median list price of about $1.7 million. This means that the median list price is about double what the median sales price is for the month of October ‘08. Given that gulf it’s no wonder that the average days on the market for the whole inventory are about 130 and counting.
Finally for the Home Estate/PUD market the number that jumped out at me was the sales price to original list price ratio for October ’08 of about 85%. This means that if a property was listed at $1 million it closed escrow at $850,000. This shows a real willingness on the part of sellers to bring the price down to where the deal can be made. What surprised me was that in October ’07 that ratio was 87% showing that same willingness to bargain. Traditionally we look at numbers in the mid 90’s for this ratio but at least for the last year sellers are doing what they can to get the deal done.
For the condo market in October ’07 there were 19 sales with a median sales price of $635,500 and in October ’08 the condo sales were in the upper 20s’ but with a median sales price of about $495,000. For most of the year the median sales price for a condo has bounced around a lot but has hovered right around $575,000. But, for the past 2 months that median sales price has dropped about $80,000+ down to approximately $495,000.
While the sales for October ’08 are substantially ahead of the numbers for ’07 the numbers of pending properties is almost exactly the same as last year sitting right around 20. But, the difference is the median list price for the properties that went into escrow last year was almost $200,000 above the median list price of properties that went into escrow this year. The only good news for condo sellers is the approximately $525,000 median list price for properties entering escrow this year is above the current median sales price by about $30,000.
The numbers of new listings coming on the market for both years is relatively close showing up right about the 50 mark. But, unlike the Home Estate new listings the condos entering the market are coming on about $100,000 below where they were last year at this time. The problem is that even though the condo sellers have adjusted their expectations the median list price is still about $100,000 above the median sales price for the month of October.
The overall inventory of condos from Carpinteria to Goleta is about 230 units and they’ve got a median list price of about $680,000. This gap isn’t quite as cavernous as that between what’s available and what’s selling in the Home Estate market but a difference of $200,000 is still substantial. This gap is exemplified by the approximately 150 average days on the market which means that those sellers have been waiting about 5 months for a buyer.
Finally, the sales price to original list price ratio for October ’08 is even below that of the Home Estate market. The ratio currently sits at about 85%, but the interesting difference is that in October ’07 that number was 96% meaning sellers were only giving up 4% of what they would have like to have gotten.
For the Santa Barbara area for the Home Estate/PUD market the numbers of sales are continuing at approximately the same pace they have been since March and it looks like they will continue at the level because of the numbers of properties that went pending in the month. The median sales price continues to go down however currently residing around the prices we saw in 2003 and should continue in that direction until the foreclosures and short pays are diminished.
For the condo market the sales are also continuing at the same pace since March but if the pending numbers are an indication those sales will soften in the coming months. The median sales price for condos has also fallen to about the 2003 level which should make those properties a lot more attractive to potential buyers.
Gary Woods