Santa Barbara Real Estate Market News - Q1 2023

Santa Barbara Real Estate Information – 2023

Are you wondering what’s happening in the Santa Barbara real estate market? We’ve got you covered with our Santa Barbara Real Estate Market News for the 1st Quarter of 2023.

See what the Santa Barbara Group gang sees from each perspective. Plus, we have some stats to help make you an even more educated real estate buyer or seller. In our opinion, an educated person is a powerful person. Enjoy!

The Santa Barbara Housing Market in a Few Sentences:

Joe: “It’s no secret that our inventory is low, at about 45% below normal. And nearly 80% of that inventory is relatively stagnant and sitting on the market. The remaining is a small fraction of homes that are highly sought after and incredibly competitive to purchase.

Values are holding strong, if not getting stronger, and buyers are struggling to wrap their minds around it.”

Garrett: “The 1st Quarter of 2023 seemed like it got off to a sluggish start across the board with fewer new listings and transactions initially taking place. I assume the extreme weather we had played a big part in all of that with both buyers and sellers putting plans on hold until things settled down a bit.

The 2nd quarter of 2023 seems like it kicked off with a noticeably different demeanor with new listings to hit the market, pending sales, and multiple offers being seen across different segments of the market. While some price ranges have seen a large uptick in activity ($2.5M and below), other price ranges have not had the same experience and have more or less been on the quiet end of the spectrum ($3-4M). The upper end – $5M and above, is experiencing a fairly active market at the moment with a lot of properties going under contract.

If interest rates find their footing, I think we’ll see a much more balanced market going into the next two quarters.”

Avi: “Looking at how the market is currently behaving compared to Q1, activity and multiple offers seem to be common on hot properties that are priced right. I had two different scenarios where my clients wrote well over asking on homes and still got beat out.

I think that prices for Q2 of 2023 will be higher than Q1, indicating perhaps Q1 was the base of the slowdown. Rates seem to be more stable and buyers who have adjusted are still as ready as ever to find a great home, even though some others have watched their purchasing power fall and are most likely going to hold off.”

Weston: “We have seen the market remain strong despite mortgage rates holding above 6%. The lack of inventory continues to drive competitiveness in the market as we have seen some properties get as many as 20 offers.

Since the big jump in these rates last June, it is no surprise that inventory has stayed in the 1.5 – 2-month range. Until this number increases, we will continue to see prices appreciate at a slower pace.”

More Stats To Help You Be A Wise Real Estate Buyer or Seller

Q1 is done and dusted. The year is flying by. Let’s hit pause for a moment and reflect on the critical statistics that shaped the housing market in the first three months of 2023.

Some numbers changed, and others stayed the same. The average sales price for a single-family home dropped 11% year over year, declining from $3.6M in 2022 to $3.2M in 2023. On the contrary, the average sales price for a condo saw virtually no year-over-year change coming in at $1.18M and $1.19M, respectively.

Perhaps, the most noticeable difference was the total number of sales compared to 2022. Sales fell a dramatic 41% in Q1 of this year, resulting in just 241 sales compared to 409 from the year prior.

Factors like inflation, fear of a recession, and spiked interest rates decelerated activity in the market, creating fewer pools of aggressive buyers and less certainty among sellers.

But as these factors level out, and as Santa Barbara remains a red-hot coastal Californian destination, we expect stronger activity in Q2. Once buyers regain their confidence and start receiving better interest rates, well-priced homes will see a greater number of offers and drive total sales up across the market.

35% of homes were purchased through all-cash offers in Q1, a number that remains relatively stable in SB’s market.

As Q2 plays out, we’ll continue monitoring the market for changes big and small and reporting back to you right here.

Thanks for joining us for our Q-1 2023 Santa Barbara Real Estate Market Report. If you have any questions, toss us an email or give us a call. We are here for YOU!

Joe , Garrett , Avi, Wes

Bershire Hathaway HomeServices California Properties
3868 State Street Santa Barbara, CA 93105
(805) 886-5735

https://TheSantaBarbaraGroup.com
Cal BRE #01314939