Persistently high mortgage rates continue to test the national and local housing market. In September, Sales were down by 18% for a total of 98 sales while median sales prices rose by over 30% from last year for both single-family homes and condos.
Luxury properties soared, with a jaw-dropping $47 million sale on Padaro Ln that sold off-market. Simultaneously, more affordable options faced similar conditions, evident in the lowest priced sale at $826,000 for a 1 bedroom 1 bathroom fixer-upper that sold in just 8 days.
While some properties continue to fly off the shelves, others are languishing, causing confusion among buyers and sellers alike. A new, notable trend in today’s market is the increasing number of price drops and homes sitting on the market. Housing inventory, which currently stands at 2.49, demonstrates a modest rise from the previous month at 2.2, indicating a growing availability of properties. However, this still falls short of the pre-pandemic levels and vastly under the 6 month mark which is traditionally considered a neutral market.
One of the key observations made when assessing market conditions was the divide between seller motivation and buyer expectations. Some sellers cling to outdated pricing strategies, while buyers have become discerning, seeking not just a house but a true investment in their lifestyle. This gap in perception has led to confusion in the market, leaving both parties uncertain about the best course of action.
With the market being less competitive, there are greater opportunities for consumers who need to purchase a home for personal reasons or those who can qualify to purchase at today’s interest rates. More sellers are making concessions as homes are taking longer to sell, fewer homes are selling above asking price, and there are more homes to choose from.
We stress the importance of strategic decision-making. For sellers, accurate pricing and meticulous presentation are paramount. In September, a staggering 56% of homes under $2M sold at or above asking price, underscoring the continued competitiveness of this segment of the market. Homes aligning with current market values and presented thoughtfully stood out, emphasizing the importance of realistic pricing strategies.
The average days on market for single family homes is 30 and 24 for condos. Homes that are not aligned with today’s market are sitting for months. Properties that experienced a price drop of 11-12% from the original listing price were the ones that eventually found buyers. In contrast, those with smaller reductions lingered on the market, indicating the need for realistic pricing strategies.
In conclusion, the Santa Barbara housing market in September is a tale of two realities- those that sell and those that sit. Sellers must align their expectations with the evolving market dynamics, recognizing the need for accurate pricing and compelling presentation. Buyers, on the other hand, should approach the market with confidence, leveraging the expertise of experienced agents to secure properties that offer long-term value.
The key takeaway from this market snapshot is clear: adaptability is essential. Both buyers and sellers must remain open to change, embracing strategic approaches that reflect the nuanced dynamics of the Santa Barbara housing market. By doing so, they can navigate the complexities of the current real estate landscape and achieve their respective goals in this diverse and vibrant market.
