REAL ESTATE UPDATE
Cristal Clarke
As we start the new year, I would like to begin by saying I hope everyone had a wonderful holiday season — wherever you may have been.
2022 was certainly an interesting year and in many ways a transitional year in the real estate market, on a national economic level and the world at large.
The June market was the high point from a price perspective on real estate values, and many now believe the recent price adjustments we are experiencing have taken us back to pre-COVID valuations.
There is certainly a case to be made for that, but there are also exceptions to that thought process. Overall, the general feeling from most sources is the market is adjusting to a more normal footing.
If you are currently selling, or thinking about selling, you may feel like you are struggling with how to price your property. If so, you are not alone. Historically, valuations have been based on what transacted/sold in the prior 12 months, as pre-COVID properties generally took several months to sell.
It is only in the last two years that we have seen a rapid marketplace where properties have sold in days or weeks — not months. As a result, what sold 12 months prior is no longer a comparable sale for a current valuation.
As we fast forward to today, some sellers are struggling with pricing, feeling they may have missed the top of the market and are possibly still trying for the needle-in-the-haystack buyer.
Buyers, however, are now a little more in the driving seat in regard to prices and are hesitant to pay that premium unless it is a move-in condition house in an A-plus location.
So what constitutes a move-in ready house?
A recent survey concluded that buyers view a house that has not been upgraded within the last five years as in need of a remodel. This may be as simple as refreshing paint, but in many cases, it extends beyond that to updating finishes in kitchens and bathrooms as well as possibly altering the layout of the house so that it flows more in line with how people live in a house today, as compared to a few years ago.
Think more along the lines of open floor plans, no formal dining room but large open kitchens with attached gathering spaces.
For December, we have seen inventory levels keep pace with new listings for the first time in several months. We have also seen an increase in the number of price adjustments.
Here are the statistics.
MONTECITO
New Listings: 6.
Pending: 5.
Price Changes: 2.
Sold: 10.
HOPE RANCH
New Listings: 2.
Pending: 2.
Price Changes: 1.
Sold: 1
SANTA BARBARA
New Listings: 17.
Pending: 26.
Price Changes: 14.
Sold: 26.
CARP/SUMMERLAND
New Listings: 2.
Pending: 5.
Price Changes: 0.
Sold: 6.
As we look forward, the market — although somewhat in flux and finding its new norm — remains optimistically strong with buyer activity still outpacing supply, albeit slightly.
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. All inquiries are fully confidential. You may also follow me on Instagram and Facebook for the latest on the current market.
Cristal Clarke is a real-estate agent at Berkshire Hathaway HomeServices, which serves Montecito and Santa Barbara.
