Santa Barbara October 2023 |
I would love to tell you something different this month, but things are kind of the same...
In the proverbial nutshell: |
Mortgage Rates and Inventory Challenges Housing affordability can be challenging in Santa Barbara. The current market is characterized by some of the highest mortgage rates seen in decades coupled with the highest prices ever recorded, Many potential Santa Barbara buyers are wondering when better affordability will return. Mortgage rates hit 8% this week. Rates haven't been this high since 2000 when the median price of a home was one-fifth of what it is today. This makes things difficult for the financed Santa Barbara buyer. Combining homes and condos the Santa Barbara median sales price for September was $1,854,000. Despite prices and elevated rates, the market remains active and competitive due to a combination of factors: 1) There are a lot of all cash buyers in our market; almost 50% of September's sales were all cash. 2) There's not enough inventory for the number of active buyers in the Santa Barbara housing market. Contributing to this shortage of inventory are homeowners who secured low-interest mortgage rates over the last 20 years and as a consequence are choosing not to sell. If they sell, where do they go? Housing inventory increased slightly in September - we have 12% more inventory than this time last year, but active listings remain less than half of historic "normal" average levels. (Think 2019.) Year over year September sales are down almost 20%, but compared to 2019 September sales are down 38%. Current mortgage rates are adversely impacting buyers and sellers. The market needs more sellers. I believe we are going to have limited inventory for quite some time. There's no great catalyst to bring a lot of sellers into the market all at once. Rates in the 5's could change the market dynamics. When will mortgage rates get back into the 5's? Not for a while... The Fed is determined to rein in inflation. Their only tool to quash inflation is higher rates. They're planning to keep the Fed Funds Rate "higher for longer," which means higher interest (great for CD's) and higher mortgage rates (bad for the housing market) for the foreseeable future. I'm guessing rates drop back into the 5's in 2025. |
Pricing Matters... Demand remains. Although inventory is light, there is regular evidence of overpriced properties. Not everything is selling in a week or two. Properties priced correctly have pended and closed all year with a median days on market of 10-20 days. Conversely, we continue to see properties overpriced on the market for 40-70 days before an initial price adjustment is made - some properties are repriced multiple times before they finally sell. Properties forced to reprice almost always sell for less than they would have if they had been priced correctly out of the gate. When it's your turn to be a seller, it's easy to be overzealous, and it's hard to separate personal emotion from one's own home. Remain objective, and do your best to put the buyer's shoes on. The more turn-key your property is, the higher the selling price. If you're a Seller, ask yourself -- Who's your buyer? |
September 2023 Sales Stats |
Total Sales: 98 -18% Median Sales Price House: $2,350,000 +34% Median Sales Price Condo: $1,374,000 +39% Median Days On Market: 13 Average Sold to List Price Ratio: 98% Sales over $8M: 5 (*I believe $8M is the new $5M.) Inventory Supply: 2.5 months |
Median Sales Price: $5,250,000 Median Days on Market: 40 Average Sold Price to List Price: 96% Off Market Sales: 2 Last September there were 15 total sales. Days on Market have more than doubled from a year ago. The pace of sales in Montecito has slowed. Sold to List Price has increased by 1%. Average Sold Price per Square Foot for September was $1,930 up from $1877/SF last year. Of the seventeen sales in September, three were over $8M; these three sold at an average price per square foot of $2,332. There are currently forty-four active residential listings in the 93108 - twenty-one of these are priced over $8M. Eight of the twenty-one are priced in excess of $20M. Montecito's volume of sales monthly seems to have normalized with historical averages, but their is one big difference, price. The entry level and median sales price for Montecito has effectively doubled from 2016. In addition to the higher end properties for sale in Montecito, there are six properties for sale on Padaro Lane, only one of which is priced under $20M. |
Santa Barbara is beautiful! People want to live here! Two things hold true in today's market. 1) It's a great time to sell if you have a plan for what's next. 2) If you need a home, and you can afford it, it's OK to buy now. You gotta live somewhere, why not here! |
Are you thinking about selling? Want to make some improvements before you sell? Let's use to pay for the upgrades. $40K of improvements - what could you do? If you're curious to know more, give me a call. |
© Compass 2023 ¦ All Rights Reserved by Compass ¦ Made in NYC 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 presented herein is intended for informational purposes only and is compiled from sources deemed reliable but has not been verified. Changes in price, condition, sale or withdrawal may be made without notice. No statement is made as to accuracy of any description. All measurements and square footage are approximate. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions. marketingcenter-- |
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