September 2024 Real Estate Update & Insights

Santa Barbara

Housing Market Insights

SEPTEMBER 2024

SEPTEMBER -- now what?

The FED is meeting this week.

They are starting to feel they've got a meaningful handle on inflation after helping create it.

They and our Washington DC government are responsible for the worst inflation rate America has seen since the early 80's debaucle.

The FED wants the annual inflation rate at 2%.

Currently, prices are only going up 2.5% per month. That's kinda good news, but that doesn't rollback the increase in prices from the last several years.

This is the same FED that managed to get inflation up to 9% while suggesting, "it's transitory" over the last couple of years.

It is expected the FED will drop interest rates by either 0.25 point or possbily 0.5 point. Great...

The economy is a huge wheel - it turns very slow. It's like driving the Titanic - iceberg ahead. Turn, turn, turn...

I do not necessarily have confidence they'll hit their target without causing economic drama, but I do hope.

We'll see...

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Market Trends September

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Sales were up for August.

Inventory grew and peaked in August. Inventory is back to pre-pandemic levels.

September's inventory is slightly lower than August - that's normal.

Days On Market are increasing.

Median price is flat

We've essentially been flat since June 2022.

The number of weekly Price Changes is increasing.

58% of August's sales sold below the list price.

Buyers increasingly have negotiating power. However, that remains true largely only for homes that have been on the market 31 days or longer. Properly priced homes continue to sell at full price and over within the first 30 days of being on the market.

The moral of the story - listing price matters.

Interest rates are trending down. That's great news for buyers but also helping folks that bought last year.

Lenders have been busy refinancing last year's sales.

Caught this note this week -

89% of mortgaged homeowners have a current (mortgage interest) rate of 6% or below

- WSJ

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INTEREST RATES

Rates are down year over year by more than 1% - this week last year rates were 7.25% and trending up. That's a painful interest rate for the financed Santa Barbara Buyer.

Today's 30 yr. fixed mortgage rate 

August 2024 Sales Stats

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Total Sales: 115 +8%

Median Sales Price Combined:  $1,769,000 +5%

Median Sales Price House:  $2,101,000 +10%

Median Sales Price Condo:   $974,000 -5%

Median Days On Market: 17

Average Sold to List Price Ratio:  96.26%

Cash Sales:  43%

Off Market Sales:  5

Sales over $8M:  3

Inventory Supply:  3.17 months

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In case you missed it last month, I've reposted the industry changes effective August 17, 2024.

........Real Estate Protocols Have Changed..........

Effective August 17, 2024

The new rules impact all residential sales of 1-4 units across the country for all Association owned MLS's. The Santa Barbara Association of Realtors (SBAOR) owns our MLS.

For more than one hundred years the total sales commission in a residential real estate transaction was wrapped up in the Listing Agreement between the Seller and the Listing Agent. The Listing Agent shared the total sales commission with the Buyer's Agent. The total sales commission was always in the sale price and a part of the economics of the deal.

THE CHANGES

For Buyers:

Beginning August 17, viewing a property with an agent will require a signed Buyer Representation and Broker Compensation Agreement (BRBC). You will have flexibility in how you structure this agreement. Options include setting the broker representation period for as short as one day, up to three months (the maximum allowed in California), or even making it property-specific.

The terms of compensation/commission for your agent will be clearly outlined in the BRBC.

Any commission (compensation) to the buyer's agent will be addressed in the buyer's offer.

For open houses, be careful what you sign as there are several different forms, ranging from a classic sign-in sheet to potentially an exclusive buyer representation agreement.

For Sellers:

There is a new listing agreement that no longer includes a line item for offering a buyer's agent a selling commission/compensation. The listing agreement will only specify the commission agreed to for your listing agent. You may still compensate the buyer’s agent if you feel it is in your best interest. Additionally, your listing agent can no longer advertise a buyer's agent commission on your behalf in the local MLS even if you wish to offer one.

However, your listing agent can advertise in the MLS that you are willing to consider "Concessions" (which can include commission) to the Buyer's Agent.

Your listing agent will be able to advertise your offer of a selling commission through other platforms and marketing material. The Compass platform will allow a listing agent to advertise the offer of a selling commission to the buyer's agent.

JUST LISTED

935 Fellowship Road

Santa Barbara, CA 931099

3BD | 1BA Main Residence

Detached 1BD/1BA Guest Unit

Detached Converted 2-Car Garage

0.32 acres

Other things found on the Mesa

Some small, some large... :-) I like my photos...

Compass Concierge

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