Join us as we wrap up 2023 by discussing November's performance, compare it to 2022, and discuss what lies ahead in 2024.
Highest and Lowest Sale Prices:
November’s most significant transaction was a $13 million, panoramic view property in Montecito Ranch Estates, situated in the picturesque Summerland. In contrast, the lowest single-family home sale was a fixer-upper near Santa Barbara High School which sold off-market for $900,000.
Median Sales Prices:
Examining the core of the market, the median sales price for single-family homes in Santa Barbara rests at $2.1 million, while condos stand at $950,000. Notably, both property types display a 0% change in price when compared to 2022, challenging the prevailing narratives of market instability in 2023. Keep in mind, the median sales price rose 15% in 2022. The large boost in 2022 allows for adjustments in 2023 without signaling a crash.
Supply and Demand Dynamics:
Supply and demand dynamics continue to play a pivotal role in our local market. Despite experiencing the lowest number of sales in the last two decades, the market remains stable with inventory at 2.2. Contrary to predictions of a crash in 2024, the market resilience is attributed to the persistent shortage in supply.
Market Trends and Insights:
Strategic pricing emerges as a critical factor in the efficient sale of a home. Although the number of price drops has increased, price drops are not necessarily indicative of a market collapse but rather a consequence of misaligned strategies by agents or sellers adhering to outdated pricing mentalities. The current Days On Market for single-family homes is 30 days and for condos it’s 24 days. This is a good indication that homes with the right strategy are still getting sold quickly.
Cash transactions serve as a robust indicator of market strength, with 2023 displaying an impressive 41% cash market year-to-date. This not only suggests confidence in the market, but it also creates a market independent of financial institutes minimizing the impact of banks and national market volatility.
Looking ahead, the evolving interest rate landscape becomes a focal point, mostly for homes under $3M. With rates already decreasing in December and the Federal Reserve hinting at further reductions in 2024, an uptick in buyer activity is anticipated. Our real-time market observations suggest a surge in pending sales, especially in more affordable price points. As rates decrease, more buyers will enter the market. With the lack of inventory in Santa Barbara, each new buyer poses competition for eachother.
As the curtain falls on 2023, the Santa Barbara real estate market stands resilient, defying the anticipated crash. Potential buyers and sellers are encouraged to get familiar with today’s market status and seize opportunities that have been presented by high equity, evolving interest rates and limited inventory.
For those considering real estate moves, Abel Ramos and Jackie Potter at Compass Santa Barbara offer a free consultation with personalized discussions tailored to your individual situation. Reach out to learn how you can accomplish making your move in 2024.