Year-Over-Year (Year End) Market Update, Santa Barbara South County

February 8, 2023

February Greetings!

January started off with a burst of rain, and a flurry of real estate activity has followed. Our beautiful area is sparkling and thankfully had little damage, despite media reports. Per the County of Santa Barbara, our reservoirs are up to their ‘spill’ levels, which is great news. Over the fall and into the holidays, we saw a slowing in the real estate market both in the number of new listings and the number of sales, but now that the large storms have passed, there is a new energy in the market and it feels as though spring has sprung a bit early this year.

National Trends

On a national level, inflation continues to trend down as energy prices have leveled off after the holiday season. We saw the Fed raise rates 7 times over the last year, which slowed sales on a national level. It was widely anticipated the Federal Reserve would raise interest rates by 25 basis points at their February meeting, and this is exactly what they did, as their 8th rate hike. If interest rates stabilize or potentially trend lower, we will continue to see high buyer demand going into the peak real estate months of spring and summer. Employment remains strong. Soft landing? We shall see. With low inventory, strong buyer demand, and lower rates, we have seen activity pick up considerably.

Santa Barbara County – South Coast

Prices have remained strong despite the interest rate increases. This has been a function of the low inventory. There are 97 single family homes available currently at all price points from Carpinteria through Goleta, and 25 condos and PUD’s (planned unit development properties). Santa Barbara County prices have remained resilient given the laws of supply and demand.

Montecito + Hope Ranch

Montecito’s median sales price went up 19% year over year, with the current median sales price for homes at $5.45M. Transactions toward the end of 2022 were over 80% cash, therefore not as impacted by interest rates. Prices have remained strong due to the continued low levels of inventory and strong demand. The number of new listings in Montecito is down 41% year over year, the largest drop of any area in Santa Barbara South County. Across all price points and all property types, there are currently 28 listings available in Montecito. The prices in Hope Ranch are up 18% year over year, with the current median sales price at $5.625M. The number of listings dropped by 28%. Currently there are only 8 available listings in Hope Ranch.

Going Forward

We anticipate the low inventory levels to continue and demand to remain strong which will lead to a continued low level of closings, but likely stable prices. We continue to watch the market closely and believe there is always opportunity.

We have been able to bring inventory to our buyer through our preferred network and decades of relationships.

If you are thinking of selling now or in the near future, please call us regarding valuation and marketing plans. We have an extensive list of buyers, and we see a great opportunity for sellers given the lack of available properties.

Each segment of the market is unique and you need a trusted advisor in this competitive market.

Warmly,

Emily Kellenberger

Founder, Emily Kellenberger & Associates

Village Properties