Santa Barbara Real Estate Market Update For July 2022

July 2022 Market Update

How do you make the right decision in a shifting market? The reality is, you will always be making decisions in a shifting market, however, sometimes those shifts are more or less dramatic, and it really depends on where the market is shifting. But how do you know?

Well, we like to start with the data. The basic data we consider includes how many homes are listed and sold, how long they took to sell, and what price they sold for. This data can show us quite a bit about the relationship between supply and demand in our market, however, it is limited to the past. Any realtor in Santa Barbara and Montecito has access to this data.

What sets Zia Group’s market analysis apart? In June, we sold over 11% of all homes sold in Santa Barbara and Montecito. That means we are working with more buyers and sellers than any other agent or team, which gives us unique insight into the daily ebb and flow of supply and demand, and the many factors that influence it. When we combine this on the ground experience with market data, we have a pretty clear picture of what is happening, and what might happen next.

So, where is the market going? As we said last month, buyers are gaining leverage in negotiations. We have experienced this more in recent weeks, especially as we’ve seen an increase in “price reductions”–meaning sellers are not getting the price they initially thought they could get and are reducing the list price on the market. Looking back to the data, the months of inventory in June was 1.33. This means that if nothing else went on the market, all of Santa Barbara and Montecito’s inventory would sell in 1.33 months–a relatively short timeframe, but longer than it’s been all year. This is another indicator that the market is shifting and giving buyers a little more leverage.

To be clear, this is still a sellers’ market–it just feels a little different than what we’ve grown used to, which was the strongest sellers’ market we’ve seen in recorded history. In June, the median sales price was still $2,207,500, 18% higher than it was this time last year. In other words, at least as of June, sales prices were still incredibly strong. We will be tracking the data as it comes in to see how the relationship between an increase in price reductions relates to sales prices. In the meantime, reach out to your Zia Group Realtor Partner today to schedule a consultation about your real estate goals in light of these changes.