How Hot is Today’s Market?
The Montecito Heat Index measures present demand for Montecito single-family homes. By focusing upon buyer contracts, rather than closed escrows which typically lag a month or longer from accepted contracts, the Heat Index provides a forward-looking indicator of both market strength and direction. It also shows us at five price-points where value is most recognized by buyers and those specific properties scheduled to close escrow. Today’s Heat Score is compared to this date last year. All data are from the Santa Barbara MLS and are uniformly deemed reliable.
Today’s Heat Index Score is 38, a decrease of 22.4% from last year’s score of 49. In November the Score was 86.
Last year on this date, the hottest sector was the entry level $1-2m with a score of 27, today it is the $2-3m group with a score of 15, just besting the entry level group by 1 and showing an increase of 50% over last year.
The $3-4m group found no buyer interest with only 10 homes available for purchase. Last year this group had 21 homes for sale.
The inventory of $4-5m homes is identical to last year and where last year there was no interest here, today it posts a 6. The $5m and up group found demand at half of last year’s level.
Year over year, we see a persistent demand for homes in Montecito. The $2-3m sector is showing exceptional demand. Closed escrows are up a full 33% from last year. That is a significant increase; Hope Ranch, by contrast, is down 25%. And, there are now 29% more listings for buyers to consider.
Looking across the state, we see a different market. The California Association of Realtors reports that sales of homes priced between $500k and $1m rose about 15.5% on average the past year, yet those above $2m dropped 3.2%. And San Francisco’s high-end market continues to trend down.
Wagering against Montecito property has probably never been a great bet. And as we repeatedly see, Montecito defies most economic forecasts. This is because, Montecito is… well, you know – and the word has gotten around. Saying that, our present data suggest a slight cooling off heading into the Spring season. In spite of great yet aged year over year sales numbers, and an increase in inventory, current signed contracts are down a significant 14%, and our median sales price is flat so far this year. Both our entry level homes and high-end estate properties are weaker and the $3-4m sector is flat. It feels like a slowing market. Buyers, well tired of our high prices and limited inventory, particularly in the middle and entry level markets, eagerly await some price easing which could help fuel a robust Spring market. In the meantime, one can’t ask for a more pleasant winter.