NOVEMBER 2022 | SANTA BARBARA REAL ESTATE UPDATE
Good morning! We love real estate and are grateful for the opportunity to help our clients. This market has sure been on some ride over the last couple of years. With so many buyers competing over so few homes, super low-interest rates, and a lot of migration this market is calming now which feels so strange after all the activity. Now with interest rates doubling and a weakening economy it sure feels like the foot has been taken off the gas.
We are thankful that, unlike the stock market, residential real estate is more than just an investment, for most of our client’s real estate is first and foremost a HOME.
So How’s the real estate market? The most notable change in the market is our drop in sales volume. The first quarter of 2022 was fairly normal, but a noticeable decrease began in April/May of 2022. At first, we thought the decrease was due to extremely low inventory, but it has become clear now that our demand has dropped over the last six months even with low inventory. Looking at our last 6 months of sales (May – October) and comparing it to the sales from 2013 to 2019 for the same time period, our total sales volume dropped by 28%.
With the decrease in demand for most properties, overall we are seeing prices decrease. This is not evident yet in our year-over-year comparison shown in our October statistics, but comparing the first 5 months of 2022 through the second part of the year, we see a noticeable 12% drop in our median sales price.
These times of transition in the market can cause many to take pause and want to understand what the new normal is. We are hopeful that we will find a new equilibrium shortly as interest rates stop their rapid increase and buyer and sellers understand the current market.
The one phenomenon that stands out to us, is how it can seem that the mass consensus is strongly positive or strongly negative on a market over a relatively short period of time. We are reminded in these times that reality is probably somewhere in the middle. The desire for home ownership will remain strong. Sales are still occurring in this transitioning market, it is just a little more to navigate at the moment.
As always, we are always here to be of assistance, feel free to reach out if you have any questions or needs.
THE HIGH & LOW
October 2022 Highest Sale | 560 Toro Canyon Park Rd, Montecito | Sold for $21,900,000
October 2022 Lowest Home Sale | 4845 Glenn Rd, Santa Barbara | Sold for $885,000
Year-To-Date | 2022
- Total Sales: 1,282 in ’22 vs 1,932 in ’21 | DOWN 33%
- Total Home Sales: 900 in ’22 vs 1,351 in ’21 | DOWN 33%
- Total Condo Sales: 382 in ’22 vs 572 in ’21 | DOWN 33%
- Median Home Price: $2,165,000 in ’22 vs $1,875,000 in ’21 | UP 15%
- Median Condo Price: $955,500 in ’22 vs $839,500 in ’21 | UP 14%
- Sales Above $5M: 119 in ’22 vs 181 in ’21 | DOWN 34%
- Total Sales: 98 in ’22 vs 172 in ’21 | DOWN 43%
- Pending Sales: 87 in ’22 vs 167 in ’21 | DOWN 48%
- Total Off-Market Sales: 9 Sales | 9%
- Total Cash Sales: 35 Sales | 36%
- Average 30-Year Fixed Rate Mortgage: 6.62% as of Nov. 28, ’22