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Where we were - where we are - and where are we going?
Appreciation has been the hot topic over the past year-and-a-half for real estate in Santa Barbara, Montecito and nationwide. Homeowners have seen some staggering price increases recently with apparently no end in sight for the right property. In Montecito, the average home price has jumped over 40% over the past year - to put this into context, the national average home price appreciation rate is between 3-5% in a typical year. On the simplest of levels, this comes down to a supply and demand issue - we’re experiencing high buyer demand and very few sellers listing their homes for sale.
Consistent with strong demand and limited supply, national home price appreciation is predicted to be 8.0 percent in 2021 (previously 4.2 percent). Zillow's forecast predicts annual home value growth will rise as high as 13.5% by mid-2021, and for home values to end 2021 up 10.5% from their current levels. Montecito and Santa Barbara are achieving even higher appreciation rates.
Here are the latest expert projections on the rate of home price appreciation for this year (see chart below):
Only time will tell if this break-neck pace for appreciation will hold, while appreciation remains strong today some experts say homes will start to appreciate at a more normalized pace next year.