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Now that June is behind us, there's evidence of another shift in the market, and some things are becoming more entrenched.
Price changes are increasing.
Interest rates remain elevated
Insurance is expensive and difficult to secure
June sales were flat YOY - identical number of sales in the MLS - 104 sales of homes and condos. Inventory was up 30% in June. Buyers have more choices. The number of weekly price changes increased throughout the month - June had the greatest number of price changes in a single month. Pending sales for June indicate July is going to be softer than last year. Median price is bouncing around the high watermark set earlier in the year. Interest rates, stubbornly high, combined with the rapid rise in housing prices the last four years are keeping a lid on sales volume.
Affordability is a problem.
Of the seventy-two single family homes sold in June, only fourteen were less than $1.5M. There was a single sale of a home under a million dollars - that home was located up off the 154 in Painted Cave. Fire insurance is difficult to find for Painted Cave and expensive when you find it.
Of the fourteen homes sold, seven sold for less than list price. three sold at list price, and four sold for more than list price, Buyers can and are negotiating.
There were six sales in excess of $8M - all six were in Montecito. All six sold for less than their list price. Buyers at the high-end have negotiating power as well.
Buyers have more choices today, and Sellers are offering more concessions.
Turn-key homes continue to sell quickly and often times with multiple offers. However, even turn-key properties are not a quick guaranteed sale if they are aggressively overpriced. Median Days on Market for all sold properties YTD is 10.5. That's quick, and those homes are selling at 99.95% of list price.
Dated, fixer-upper homes are demanding a discount to sell quickly. If they are overpriced, they're sitting.
If a property is not sold in the first 30 days, they are repricing, sometimes several times. Every 30 days a property sits on the market unsold the final selling price drops on average 5% - 7% per month. You don't want to overprice.
Construction costs are expensive. Buyers are no longer snapping up whatever's available. They are willing to wait. They have to be incentivized to move on something.
Properties in inferior locations, on a busy street for example, are taking even longer to sell. Buyers are showing restraint.
And then there's insurance or the absence of insurance proving to be it's own source of consternation for buyers and sellers. Insurance has become increasingly expensive and difficult to get. Homes above the 192 and other areas with greater fire risk are finding it difficult to secure insurance other than the California Fair Plan. Insurance, even in traditional neighborhoods, can be hard to find and expensive. The insurance industry is at odds with the amount of risk they are being asked to cover to insure homes in California. This does not bode well for the greater California housing market.
State government is going to have to make policy changes for the insurance industry to return to California.
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Median Sales Price Combined: $1,718,500 -7%
Median Sales Price House: $1,995,000 -16%
Median Sales Price Condo: $1,085,000 +18%
Median Days On Market: 10.5
Average Sold to List Price Ratio: 97%
Inventory Supply: 3.03 months
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Once upon a time in 1994 - Tavarua, Fiji
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Sales were up 15%, but well below 2019 levels.
Median sales price for homes was up but seems to be stabilizing - sort of bumping against a ceiling.
Interest rates spent the first half of the month falling from 7.41%, all the way down to 6.99%, but then bounced right back up the second half of the month finishing at 7.29% - not helpful. May interest rates impacted June sales.
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Median Sales Price Combined: $1,849,500 +9%
Median Sales Price House: $2,600,000 +7%
Median Sales Price Condo: $929,000 -2%
Median Days On Market: 10
Average Sold to List Price Ratio: 98%
Inventory Supply: 2.6 months
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Found this little gem with an extensive amount of deferred maintenance. This little Goleta fixer was exatly what my buyer-client was looking for. Super delighted to help her with her first home purchase.
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You don't have to sell your home as a fixer-upper. Maximize the value of your home with Compass Concierge.
Use our money - up to $40K - to make needed repairs and updates with no up front out of pocket expense.
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If I can do anything real estate for you, please reach out. Thank you for your continued trust and referrals!
...........................................................................
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Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. 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.
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