Santa Barbara Real Estate Market Update For November 2022

November 2022 Market Update

The number one indicator of whether we’re in a seller’s market or a buyer’s market has always been the months of inventory: a comparison of the amount of inventory we have to how long it takes to sell that inventory. This usually gives us a pretty good indication of the current relationship between supply and demand. Since July, the months of inventory has hovered around 1.5 months, meaning that if nothing else came on the market, all the inventory would sell in about a month and a half. 

What does all of this mean? Well, it’s certainly still a seller’s market, and as long as inventory remains this low, it will likely continue to be. Inventory dropped to 65 new single-family home listings in October and only 30 new condominiums went on the market. That’s fewer new listings than we’ve seen all year in any given month. 

Yet, as we know, buyer demand has also gone down. Is it lowering at the same rate? Faster? Slower? The fact that months of inventory has remained relatively constant for the last few months indicates that it may be lowering at the same rate. In other words, the ratio of supply to demand hasn’t shifted much. So, while homes are taking longer to sell this year compared to last year (by about 39% overall), they are still selling and still selling at an excellent pace. 

In fact, 92% of the number of homes that went on the market in October sold, which is stronger than September (at 87%) and close to August (at 96%). Additionally, while we have seen more price reductions than we got used to seeing in 2021, prices remain strong. The year-to-date median sales price is still 16% higher than it was a year ago, meaning that home values are higher than they were this time last year. Price reductions do not necessarily mean that home values are depreciating, but just that Sellers are more frequently using this strategy to generate additional short-term interest on their homes. 

We realize that all of this data and information doesn’t necessarily make it easier to make a personal decision to buy or sell a home right now. So many other factors go into that decision. That’s why we believe in using this data, along with on-the-ground experience, to offer you the information you need as you explore your options and make the right decision for your family. Give your Zia Group Realtor Partner a call today to see what this might mean for you and come up with a specific strategic plan to take advantage of the opportunities presented in this market.