By Rodney Smeester
SYV Association of Realtors
It is a new year, so it’s time to analyze how the Santa Ynez real estate market fared in 2017 and determine what might happen in 2018.
The local real estate market performed quite well in 2017. The end of the year statistics show that the valley finished the year with a strong December that contributed to a strong fourth quarter. Sales and prices for the entire year were up significantly over the prior year, as shown in the table. The California Association of Realtors (CAR) forecasts similar growth for 2018.
In December, sales of single family residences in the SYV increased to 23 units sold from 16 units sold in December 2016, up 43.8 percent. The median price increased 6.7 percent from $740,540 to $790,000 while the average sales price increased 6.5 percent from $843,072 to $898,256. As a further sign of strength, the average days on the market (DOM) decreased significantly, from 238 days to 81 days, down 66 percent.
In the fourth quarter, sales in the valley increased from 65 units in 2016 to 75 units in 2017, up 15.4 percent. The median price increased 11.4 percent from $660,000 to $735,000 while the average sales price increased 11.0 percent from $841,039 to $933,638. The DOM confirmed the broad market strength in the valley market during this time period. The DOM had similar improvement with a decrease from 155 days to 105 days, down 32.3 percent.
SYV Association of Realtors recorded 328 single family residences sold in 2017 compared to 289 units sold in 2016, an increase of 13.5 percent. The SYV median price in 2017 was up 6.2 percent from 2016. It increased from $697,000 to $740,500. The average sales price for the year was up 3.8 percent from $992,763 in 2016 to $1,030,296 in 2017. The DOM decreased 5.9 percent in 2017 from 153 days in 2016 to 144 days.
It was a very healthy year for Santa Ynez Valley real estate. In California, sales of existing single family homes were up 1.4 percent and the median sales price was up 7.6 percent in 2017. SYV did much better in sales, up 13.5 percent, and was reasonably close on median price, up 6.2 percent. The 12 percent difference in sales may appear extreme but is an acceptable variation in a small market as is the Valley. The SYV 2017 real estate market performed comparably with the rest of the California real estate market.
CAR predicts that the state’s existing home sales will increase 1 percent and that the median price will increase by 4.2 percent in 2018. The Santa Ynez Valley should see similar numbers, but this forecast did not account for the federal tax reform that was passed in December 2017. Most taxpayers are concerned with how this reform is going to affect their pocketbook.
However, the limitations on the mortgage interest deduction, the state tax deduction, and property tax deduction are not going to be a large enough burden to stop a robust economy like the mortgage meltdown affected the economy in 2007. Current economic indicators and the recent performance of the stock market suggest that America is in a robust economic period. If any forecasts need adjusting, CAR may need to adjust their numbers upward, not downward.
2017 was a good year for the Santa Ynez Valley real estate market and 2018 appears to have economic factors that will create more growth, similar to 2017.