August 2021 Market Update
Is the market really slowing down? For the first time all year, fewer homes sold in a month compared to the same month of the previous year. The difference isn’t staggering, though. In July 2020, 121 homes were sold in Santa Barbara. In July 2021? Just 118. With a difference of just 3 sales, we might as well be talking about a market that is on par with the previous year.
But we’re not. The market of July 2021 is a significantly different market. Why? Lower inventory. In July 2020, we had more than 4 months of inventory to sell. 4 months certainly indicates a seller’s market, but today’s months of inventory remains even lower at 1.17 months. In fact, since January, Santa Barbara’s months of inventory has stayed under 1.6 months.
Because inventory is so incredibly low, prices remain high. The average sales price for a single family home in the month of July was $3,182,872, 37% more than the previous July. This incredible average is corroborated by the year-to-date average sales price of $3,157,413. Not to mention, the total volume sold in July 2021 was up 33% from the previous July.
What does all of this mean? Is the market slowing down, as indicated by the slower sales activity we are seeing? If it is slowing down, why are prices still so high? Will they soon begin to fall? Well, while we certainly wish we could predict the future, we can’t say anything with certainty. We do know, however, that months of inventory tends to be the strongest indicator of what will happen with the market–so long as nothing else interferes! As long as months of inventory is low, we know that demand is high and supply is low.
We strongly recommend you talk with your Zia Group Realtor Partner about how this impacts you and your family. Whether you are (or aren’t) considering selling or are wondering how this impacts your ability to purchase your dream home, we are here to discuss your home value, to talk through your options, and ultimately to help you make the wisest decision for you and your family.
*It is worth noting that last month, looking at the data from June, the average sales price was a million dollars lower than it had been in May. This made us pause and wonder if things were indeed slowing down. However, considering the year-to-date data gives us a stronger sense that the shift in the average price likely had more to do with outliers or other unknown factors. Seeing that the average price is back up again this month also gives us more confidence in this understanding of the numbers.
South Santa Barbara County Single Family Homes for August 2021
Including annual change | See definition of terms