MAY 2022 | SANTA BARBARA REAL ESTATE UPDATE
Our market remains active and multiple offers are still commonplace, but the market is starting to feel a little different.
What is going on with the market… A number of years ago, I heard a real estate analyst share an idea of momentum in a market. He watched for the momentum to shift. He likened it to throwing a football, it climbs and climbs until it reaches the top of the arch then drops and drops until the ride is over. His thought or theory was that the first sign of a market change was when the momentum falls.
I liked the theory, I have seen it true in one market and not another, but it sure makes me think. Today it feels like the momentum is changing. We still have plenty of buyers and homes are selling quickly but…
Might our market be changing? Since May of 2020, our real estate market has faced very few headwinds as it reached record highs. Prices have been appreciating so quickly and our sales volume has been unmatched. The vast majority of homes are selling as quickly as sellers are willing to review offers.
So why are we saying this?
Inventory is growing a little. Over the last few weeks, our total number of homes and condos available between Carpinteria to Goleta has grown. Not hard to do when it has been so low. For the last three weeks on May 10, 17 & 24, we had 141, 142, & 153 available homes and condos for sale respectively. This is still very low and only represents about a month’s supply of homes, but percentage-wise it is decent growth as our inventory averaged around 100-110 homes for the previous few months.
Offer volume is dropping. When we say that the momentum might be changing, don’t get us wrong, properties are still receiving multiple offers, but others are not. The total number of offers are decreasing. We are finding that some properties are not as busy as expected.
For instance, about six weeks ago a home in a coveted neighborhood received 17 offers. Two weeks ago, in the same neighborhood, a very comparable property only received 2 offers. This surprised us, but should also be tempered that in a normal market any amount of multiple offers is great or even a home going under contract in the first couple of weeks is historically very good.
We are also noticing a few more price drops, something that was very rare a few months back. But two years ago was very normal even in a healthy market.
Overall, our country’s economic news has not been great. With record inflation, a weakening stock market, supply chain issues, rising interest rates, etc… might it be causing our market to cool a little?
Over the years, we have seen pauses in the market that last a few weeks, then we realize that the sky is not falling and then it takes off again. But at the same time historically, all markets are cyclical.
We will see what is ahead and always we want to keep our clients informed.
THE HIGH & LOW
April 2022 Highest Sale | 700 Picacho Ln, Montecito | Sold for $52,000,000
April 2022 Lowest Home Sale | 136 W Haley St, Santa Barbara | Sold for $820,000
Year-To-Date | 2022
- Total Sales: 545 in ’22 vs 753 in ’21 | Down 28%
- Total Home Sales: 378 in ’22 vs 535 in ’21 | Down 29%
- Total Condo Sales: 167 in ’22 vs 218 in ’21 | Down 23%
- Median Home Price: $2,300,000 in ’22 vs $1,900,000 in ’21 | Up 21%
- Median Condo Price: $896,000 in ’22 vs $819,250 in ’21 | Up 9%
- Sales Above $5M: 62 in ’22 vs 66 in ’21 | DOWN 6%
- Total Sales: 136 in ’22 vs 219 in ’21 | DOWN 38%
- Pending Sales: 134 in ’22 vs 197 in ’21 | DOWN 32%
- Total Off-Market Sales: 25 Sales | 18%
- Total Cash Sales: 31 Sales | 23%
- Average 30-Year Fixed Rate Mortgage: 5.25% as of May 27, ’22