Archive » November 6, 2008
Real Estate View
By Michael Phillips
Montecito Heat Index
The Montecito Heat Index is a snapshot of today’s demand for single-family Montecito homes. Rather than a measurement of sales which became pending or under contract at least a month ago and referred to as lagging data, the Heat Index looks at homes currently under contract, which constitutes a more accurate picture of today’s market demand. The precise formula is pending sales (homes under contract and not yet “closed” or sold) divided by active listings x 100. And since real estate markets are seasonal, and often vary monthly, today’s demand is compared to this date last year. All data is from the Santa Barbara MLS.
Last month, the Heat Index registered a collective 60 for the five price sectors measured with the $1-2m sector enjoying the greatest buyer demand scoring a 23.
Today’s Heat Index registers a 48. This is the lowest Heat score since we began looking at demand in May of 2007. Last year for this period, the score was 62.
The $1-2m Sector Enjoys Greatest Demand
The low-end $1-2m group again takes the honors as most in demand with a strong showing at 30, outperforming last month at 23 and easily outperforming last year’s score of 7.
Here the good news pretty much ends. The typically well scoring $2-3m group scored a 6, the $3-4m sector reached an 8, the $4-5m group scored a zero for the second month in a row and the $5m and above sector scored a 3. All underperformed last year.
High End Suffers
With 78 homes on the market competing for attention, nearly double that of a few months ago, only two homes are pending in the $5m and up group, one in the $7m range and the other $5m.
Condos don’t have much to say for themselves either. In spite of listings being down 15% from last year, sales are down 42%, and the median price is down 2% at $1,381,500.
So how does the market look compared to last year? The number of sales for the year is down 18% yet improved from down 22% last month, and the median sales price is up 16% for the year, yet lower by 13 points from last month’s 29%.
The median price is down 2% in every other neighborhood in greater Santa Barbara. And although we are up 16% on the year, losing 13 points in median price in less than 30 days is significant. Buyers are increasingly present in the $1-2m sector, and although helping the Number of Sales stats, they are found little where else.
The Wall Street Journal claims that everywhere they look, luxury real estate sales – Trophy Homes I believe they call them – have slowed to a snail’s pace. It seems they may have looked here. Until the higher priced sectors, particularly the very high end, start contributing, we can expect median sales price numbers to continue to move towards the lower end.
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