June 2021 Market Update
As we head into the summer months, we typically expect to see the market heat up. In our current market, however, there has been some speculation–can the market get any hotter? It would appear that it can! Last month we shared that the average home and estate sales price was, astonishingly, $2,963,643 for the month of April. The month of May? $3,800,737. Nearly a million more and 75% higher than it was in May 2020. To corroborate this information, we also consider the median sales price. In May 2020, the median sales price for homes and estates was $1,261,875. May 2021? $2,375,000–88% higher than the average.
Why is there such a huge difference? Well, first of all, inventory remains low. While we’ve seen the inventory increase slightly from 1.05 months of inventory in April, to 1.2 months of inventory in May, there are still many buyers eager to find a home in a market without very many homes. So, prices can remain high. Second, if we look closer at the statistics, we see that while 150% more listings sold in May than the year before, a total of 215% more homes sold in Montecito–and 300% in Hope Ranch! That means that while it is true all home prices are up, the luxury market is moving more quickly than it did a year ago, driving up both the median and average home prices across Santa Barbara.
Let’s take a closer look at the luxury market. As stated before, the luxury market has tripled the number of homes and estates sold since May 2020. If we look closer at the overall volume, we see even higher numbers. The volume sold in Montecito in May 2021 increased 394% from the previous May. That can only mean that Montecito’s home values have gone up significantly. Indeed, the average sales price for Montecito homes was $7,311,415–a 57% increase from the previous year.*
What does all of this mean for you? If you have a real estate investment–or if you are considering investing in real estate anytime soon–it is imperative that you speak with your real estate advisor to discuss how you can take advantage of this incredible market, or what you need to do to become a competitive buyer in the strongest seller’s market we’ve ever seen. We truly hope that we have earned your trust–and the right to be your real estate economists of choice. The summer is only getting started, and we look forward to advising you through whatever comes next!
*Interestingly, Hope Ranch prices appear to have gone down–however, given that Hope Ranch is such a small area and provides only a small sample size, it makes sense that the numbers aren’t quite as reliable. With only 2 sales in May 2020 and 8 sales in May 2021, average prices are likely to be skewed.
South Santa Barbara County Single Family Homes for June 2021
Including annual change | See definition of terms