December 2025 Real Estate Update & Insights

Santa Barbara

Housing Market Insights

DECEMBER 2025

How's the Market?

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It's good!

It's a good market to be a Seller.

It's a fine market to be a Buyer, if you can afford Santa Barbara.

38% of this year's sales have been all cash.

There is inventory. Prices are higher than they used to be. Interest rates are in the 6's.

If you want to buy or sell Santa Barbara, define your needs and parameters, and let's go to work.

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Inventory is up: 21% YTD

Sales are up: 11% YTD

Median sales price is up: 6% YTD

Price changes are up: 60%+

Days on market for active inventory is up: 22%

Interest rates are in the low 6's

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The overarching theme of 2025 is don't be overpriced.

Is everything selling? No. Is it a Buyer's market? Not necessesarily.

Is it a Seller's market? If priced right, yes. Are there deals? Relatively, yes. Can Buyers negotiate? Sometimes. Does everything sell at the right price? Yes.

Only 15% of November's sales sold over the list price.

Some properties are selling quickly with multiple offers; some are selling quickly with a single offer; and some are receiving no offers.

Buyers at all price points are deliberately looking for value and selectively choosing properties and prices.

Residential real estate is about feelings. People buy homes based on how the home makes them feel. Price generates a feeling. If buyers and agents don't feel there is sufficient value in the price of a property, they either ignore the property or they attempt to negotiate a better price.

Overpriced properties take longer to sell and generally sell for less than they could have had they been priced properly in the beginning.

Business Wire recently reported,

"...the typical home is now taking 48 days to sell, the slowest October pace since 2019. Buyers have gotten cautious and picky, and they’re waiting for a deal that feels right."

57% of the homes sold in 2025 through October had at least one price cut, according to the National Association of Realtors (NAR). That indicates a significant number of sellers are entering the market with unrealistic expectations.

Between 2020 and 2024, that share was closer to 47%.

It's happening here too... Appropriately priced homes are selling quickly. Some properties are selling with multiple offers within days of coming to market or even a single offer, while others languish on the market for months...

Overpriced homes take longer to sell. The theme across the country is we have more inventory and a lot of it is overpriced. You don't want to be overpriced.

THE LUXURY MARKET

(primarily Montecito)

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- Homes priced over $8M -

We are seeing similar overall trends - more inventory this year, more sales this year, Overpriced properties are sitting. Median price is up, but days on market are much longer, and the resulting selling price is typically below the listed price, sometimes well-below.

The ultra high-end has been very busy this year. There have been ten sales over $20M just since June of this year. That's a record!

30% of 2025 luxury sales happened off market. In 2024 the number was 36% of luxury sales happened off market.

Total luxury property sales are up. We may surpass the 2019 number of sales. In the luxury market all cash transactions have been 50-77% of monthly sales this year in all but two months; those two months were 41% and 46%.

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Patience won't sell your home...Pricing will...

https://www.keepingcurrentmatters.com/2025/09/11/patience-wont-sell-your-house-pricing-will/

More journalistic coverage of overpriced properties...

The Wall St. Journal reports,

"Overpriced houses are languishing on the market as buyers continue to be deterred by elevated mortgage rates and persistent economic uncertainty.

Many sellers optimistically price their homes based on sales from earlier in the 2020s, when they saw neighbors’ homes get snapped up quickly at high prices."

https://www.wsj.com/real-estate/when-home-sellers-set-prices-too-high-theyre-paying-for-it-86fe1866?mod=djemwhatsnews

~ Wall St. Journal 11.25.2025

CALIFORNIA

Property taxes can be their own deterrent to affordability in California.

Prop 13, Prop 19 & Your Taxes

This is an insightful interview.

https://www.youtube.com/watch?v=CncMr_PJ2w0

INTEREST RATES

Rates began the year over 7% and have meandered down but remain above 6%. The FED lowered the Fed Funds Rate three times this year - September, October, and again on December 10. Mortgage rates went up in September and October and adjusted down a little on December 10. Rates have been hanging around 6.25% of late. Rates this year have ranged from a low of 6.17% - 7.04%.

Today's 30 yr. fixed mortgage rate

— Mortgage News Daily

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INVENTORY 2025

Active housing inventory has increased across the country this year. Some markets have inventory levels back above 2019. Santa Barbara inventory is up but not back to 2019 levels.

Sales Stats

NOVEMBER 2025

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November Total Sales: 108 +17%

(96 sales over $1M)

Median Sales Price Combined: $2,000,000 +11%

Median Sales Price Home: $2,412,500 +20%

Median Sales Price Condo: $1,182,500 +21%

Median Days On Market: 29

Average Sold to List Price Ratio: 96%

Cash Sales: 39%

Off Market Sales: 6

Sales over $8M: 9

Inventory Supply: 3.1 months

The above stats include off-market sales.

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Just Sold

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Sold

406 Lincolnwood Place

Santa Barbara , CA 93110

Sold over list price in 3 days. Price matters. Value matters. There has to be discernable value in the price.

Sold

2082 Las Canoas Rd

Santa Barbara, CA 93105

On the market for 9 months. Sold for less than half of the original list price - $10,950,000

Sold

5946 Hickory St. #2

Carpinteria, CA 93013

Sold

512 E. Islay St.

Santa Barbara, CA 93101

Compass Concierge

COMPASS will loan you up to $40,000 to make repairs, upgrades, improvements, staging, etc. prior to going on the market.

Prior to selling, maximize the value of your home with Compass Concierge.

You don't have to sell your home as a fixer-upper. Use COMPASS dollars - up to $40K - to make needed repairs and updates with no upront out of pocket expense.

Learn More

From my family to yours...

Merry Christmas!

Happy Hannakah!

and wishing us all a Happy New Year!

See you soon...

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Kirk G. Hodson

REALTOR®

M: 805.886.6527

E: [email protected]

W: kirkhodson.com

DRE# 01908650

Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 01527235, 01527365. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.