It is a new year. It’s time to analyze how the Santa Ynez real estate market fared in 2017 and determine what might happen in 2018. The real estate market in the Santa Ynez Valley* performed quite well in 2017. The end of the year statistics for 2017 show that the Santa Ynez Valley (SYV) finished the year with a strong December that contributed to a strong 4th quarter. Sales and prices for the entire year were up significantly over the prior year, as shown in Table 1. The Santa Ynez real estate market in 2017 has continued to improve and 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%. The median price increased 6.7% from $740,540 to $790,000 while the average sales price increased 6.5% 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%. Not only were sale and prices up, homes were selling quicker than the previous December.
In the 4th quarter, sales in the Valley increased from 65 units in 2016 to 75 units in 2017, up 15.4%. The median price increased 11.4% from $660,000 to $735,000 while the average sales price increased 11.0% from $841,039 to $933,638. The DOM confirmed the broad market strength in the SYV market during this time period. The DOM had similar improvement with a decrease from 155 days to 105 days, down 32.3%.
SYV Association of Realtors recorded 328 single family residences sold in 2017 compared to 289 units sold in 2016, an increase of 13.5%. The SYV median price in 2017 was up 6.2% from 2016. It increased from $697,000 to $740,500. The average sales price for the year was up 3.8% from $992,763 in 2016 to $1,030,296 in 2017. The DOM decreased 5.9% in 2017 from 153 days in 2016 to 144 days.
December, the 4th quarter, and the year; all of these time periods reported positive numbers in each category. It was a very healthy year for Santa Ynez Valley real estate. In California, sales of existing single family homes were up 1.4% and the median sales price was up 7.6% in 2017. SYV did much better in sales, up 13.5%, and was reasonably close on median price, up 6.2%. The 12% 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 1.0% and that the median price will increase by 4.2% 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 how this reform is going to affect their pocketbook. 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 did back 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.
By Rodney Smeester
REALTOR®, DRE # 01925202
SYVAOR Board Member & MLS Committee Chairman