REAL ESTATE UPDATE
Cristal Clarke
I hope everyone had a wonderful Thanksgiving holiday, wherever you may have been!
I am forever thankful for the trust placed in me by my clients to continually represent them in their real estate needs. I, as do all agents, know you have a choice and because of the choices my clients made this year, I am pleased to announce my yearly donation to the Santa Barbara Chapter of the Berkshire Hathaway Charitable Foundation in the amount of $50,000.
The real estate market continues to feel like swimming against the tide in some ways, with many “experts” talking about recession and rising interest rates, and certainly we all need to be mindful of the current and future economic conditions.
However, locally we still have many local, out-of-area and out-of-state buyers seeking to buy. Although we’ve experienced some easing in the past four weeks, the continued shrinking inventory base is expected to persist into early 2023, which means prices are still being supported for the most part.
The market is very price-sensitive right now and no matter the demand level, if a property is not priced in accordance with the new market realities, buyers are and will give push-back on prices and expectations.
Priorities of “I just have to have a house” are now replaced with a more reserved decision-making process based on location, property condition and price point.
For November, we have seen inventory levels keep pace with new listings; the first time in several months. We have also seen an increase in the number of price adjustments.
Here are some statistics.
Montecito
New Listings: 8.
Pending: 8.
Price Changes: 5
Sold: 4.
Santa Barbara
New Listings: 28.
Pending: 29.
Price Changes: 14.
Sold: 31.
Summerland/Carpinteria
New Listings: 8.
Pending: 7.
Price Changes: 1.
Sold: 4.
Hope Ranch
New Listings: 4.
Pending: 0.
Price Changes: 3.
Sold: 0.
On a national level and looking at the S&P/Case-Shiller home price index: The June 2022 market high point was U.S. housing prices, which also represented the 10-year mark where housing prices had continued monthly price gains. Just think about that: 120 straight months of price increases nationally for real estate! This also represents the longest continual growth in U.S. history.
I do not think we should be surprised that the market has adjusted in the last few months and taken a more conservative approach. The national index was down just over 1% for October, the 20-city index was down 1.64% and the 10-city index was down 1.62%. We are currently waiting for the November data, but it is expected to continue its downward trend, at least for the time being.
Before you run for the hills and sell everything, it is important to note that for the past year these very same indices are up 9.34%, 8.85% and 8.26%.
So, as we look forward to the new year, the market, although somewhat in flux, remains strong with buyer activity still outpacing supply, but pricing is key in the current environment and will be moving forward. Interest rates, although easing slightly in recent weeks, and continued uneasiness regarding economic downturn possibilities will continue to weigh on the market. There is a light at the end of the tunnel regarding insurance, as more companies are starting to come back into the local marketplace and offer coverage options.
As always, if you have any real estate questions, please feel free to reach out to me, and all inquiries are fully confidential. You may also follow me on Instagram @cristalsb and Facebook @montecitoestate or visit my website at Montecito-estate.com.
Cristal Clarke is a real-estate agent at Berkshire Hathaway HomeServices, which serves Montecito and Santa Barbara.
