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Santa Barbara
Housing Market Insights
MARCH 2025
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.................................................................................................................................................
Market Trends March
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SALES
...are up YTD in 2025.
January and February combined are up 15% YOY. That's a healthy increase. However, we remain below prepandemic levels - 16% down from 2019 levels.
INVENTORY
...levels are up dramatically this year.
Every week this year inventory has been up over the same week in 2024. Late February into the first two weeks of March Active inventory is up 60% to 80%.
Available homes priced over $8M have doubled YOY, but there are no homes priced under $1M.
There were only nine homes sold last year under $1M in all of South County Santa Barbara, and I had the honor of finding and negotiating successfully for a client on the lowest recorded sale of the nine not in the Painted Cave area.
It was a FIXER.
7490 Evergreen Dr
Goleta, CA
2BD/2BA
1190 SF
SOLD: $771,300
The new entry level price threshold is $1M to $1.5M, and it doesn't buy you much.
Inventory Activity for the week of 03.11.2025
(Homes & Condos)
Active Inventory - 280 (65 DOM)
(Single Family Homes)
(Under $1.5M - 20 || Over $8M - 62)
New Listings - 36
Price Change - 22 (46 DOM)
Pending - 28 (15 DOM)
Closed - 25 (10 DOM)
Back on Market - 3 (95 DOM)
Coming Soon - 4
(DOM = Days On Market)
HOWEVER...
Entry level priced homes and condos are up 55% to 100% in value over the last five years. A home that was 1.5M in 2019 now commonly sells for $2.7M+/-. Two bedroom condos that were $400K are now $625K - three bedroom condos that were $600K now sell for $1.2M.
We have inventory, but...
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Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, March 26, 2025.
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---------------------------------------------
INTEREST RATES
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Interest rates remain a source of contention, but the market is getting used to the new normal, rates in the 6's, all the while hoping for rates to fall back into the 5's. Everything I've read suggests rates may get back under 6% in 2027.
September 2024 the FED lowered the Fed Funds Rate by 0.5% (1/2%), and mortgage rates started moving in the opposite direction. Rates went from 6.11% in September to as high as 7.26% in mid January.
Late February rates dropped back under 7%.
Currently, rates are bouncing around in the high 6's.
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Interest rates are having a negative effect on our buyers, on affordability. The higher rates reduce buying power and stretch budgets. We have more inventory, and sales are trending up for the year, but a lot of buyers are being priced out of our housing market. The pandemic coupled with inflation has increased values by 50% to 100% across South County Santa Barbara. Interest rates are more than double the rates from 2019 - 2021. Add in California's insurance woes, and it's a perfect storm for buyers. Affordability for the middle class is quickly erodinig. It's not good.
It's great to be a seller leaving the area, but it's not good for young people wanting to buy a home, start a family, and make Santa Barbara home.
Current owners that may one day become sellers remain a part of the inventory equation. Many don't want to sell or can't afford to sell because they have a great low interest rate and/or purchased their home years ago. The cost of a replacement property is prohibitive.
What will be the catalyst for them to sell?
According to third-quarter 2024 data released by FHFA, 73.3% of U.S. mortgage borrowers now have an interest rate below 5.0%—a decline of 12.2 percentage points since Q1 2022. - Jan. 2. 2025
Today's 30 yr. fixed mortgage rate
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February 2025 Sales Stats
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Total Sales: 102 +15%
Median Sales Price Combined: $1,907,500 +20%
Median Sales Price House: $2,665,625 +18%
Median Sales Price Condo: $1,450,000 +51%
Median Days On Market: 12
Average Sold to List Price Ratio: 98%
Cash Sales: 33%
Off Market Sales: 5
Sales over $8M: 3
Inventory Supply: 2.68 months
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Montecito
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Inventory is up.
Price is up.
Days On Market are up
Sales are up.
The luxury market has been active this year. Montecito has had 34 home sales in the first two months of the year with a median sale price of $7.864M and another 7 condo sales at a median sale price of $3.406M
Last year for the same time period Montecito had 26 home sales and zero condo sales. The 2024 Median sales
price was $5.208M
The median sold price for all single family homes in Montectio in 2019 was $3.029M.
Prices are up more than double in five years.
We've seen six $20M+ sales already this year in the South County. Five of those were in Montecito. Last year this time we had seen only three sales at this price level (all in Montecito).
However, with all this Montecito activity, a large majority of homes and condos are not selling at (or above) list price.
Buyers are successfully negotiating.
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36 Vista Del Mar Drive
Santa Barbara, CA 93109
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7801 Day Rd
Goleta, CA 93117
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Maximize the value of your home with Compass Concierge.
You don't have to sell your home as a fixer-upper. Use our money - up to $40K - to make needed repairs and updates with no upront out of pocket expense.
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Until next time...
If I can do anything real estate for you, please reach out.
Thank you for your continued trust and referrals!
...........................................................................
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Kirk G. Hodson
REALTOR®
M: 805.886.6527
E: [email protected]
W: kirkhodson.com
DRE# 01908650
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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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