Recapping 2023’s Real Estate Market

Here is a deep dive into the state of the housing market in Montecito, Santa Barbara, and the Santa Ynez Valley, along with my predictions for 2024. Let’s look at the numbers. 

South Santa Barbara County Stats 

South Santa Barbara County (Goleta to Carpinteria) saw the sale of 1,011 homes and condos in 2023; this is down from 2022 when the total number was 1,382, and down significantly from 2022, when the total number of homes and condos sold was 2,107. Single-family home sales were down 28% from 2022: 735 homes sold in 2023 vs.1,022 in 2022. and 1,542 in 2021!

While the number of sales slumped, prices stabilized. By end of year the median sales price for homes in South Santa Barbara County landed at $2.1M, compared to $2.2M in 2022 and $1.9M in 2021. Median sales price for condos rose significantly, crossing the $1M mark and landing at $1.2M. This is compared to $960K in 2022, and $830K in 2021. Sales of condos are down 22% from 2022; 276 condos sold in 2023 vs. 356 sold in 2022. Sold prices range from a 1/1 for $515K in Goleta to $6.3M condo in Bonnymede for a 3/3 in Montecito Shores. 

November and December were extremely slow months in our local markets: 46 homes closed in November and the same number closed in December, marking the two slowest months of the year. For perspective: in an average year, we’d expect to close 80-120 homes in each of those months. 

Montecito 

Montecito’s sales volume was significantly down from prior years. We saw the sale of 164 homes and condos, which coincidentally is the exact same number of sales we saw in 2018, the year of the 1/9 debris flow. That number was 203 in 2022. Sales ranged from a $1.3M condo on Coast Village Road to an 8-acre estate with pool and guest house on San Ysidro Road for $22M. That same estate was then flipped and listed for $46M five months later; it was taken off the market after 30 days. 

The number of high-end sales in Montecito seems to have stabilized; 27 homes over $10M sold in 2023, compared to 31 in 2022 and 46 in 2021, at the height of the market.

Average and median home prices are comparable to last year: $6.7M and $5.1M, respectively, compared to $6.7M and $4.7M in 2022. 

January has brought renewed momentum in Montecito: 10 properties have closed, and 12 new properties have been listed. There are currently 42 homes and condos in the market in Montecito, with 10 properties in escrow. 

Santa Ynez Valley

In 2023, 139 homes closed in the Santa Ynez Valley – including Santa Ynez, Solvang, Los Olivos, Ballard, and Buellton – compared to 195 in 2022. Sales ranged from a 2/1 in Solvang for $725K to a 20-acre ranch in Solvang that sold for $15M, the highest sale of the year in the valley. 

The average sales price in the valley was just over $2M, with a median sales price of $1.5M. This is on track with 2022, when the numbers were basically the same. Prices have stabilized after skyrocketing 30% in 2022. On average, homes in the valley sell for 95% of their list price.

The average number of days on market in the Santa Ynez Valley was 62 compared to 53 in 2022 and 55 days in 2021. A lack of inventory continues to plague the valley, which is very heavily due to the high interest rate we experienced the entirety of last year. While a slower year overall, we saw many local buyers trading up in the valley, as well as buyers who were priced out of Santa Barbara and Goleta. As is typical, we also have out-of-town buyers seeking the peace and serenity of the Valley, for both primary and secondary home use. 

Sales in the condo segment have dipped, as there were only 20 sales the entire year, compared to 26 in 2022 and a whopping 45 in 2021. The decrease was due to the previously mentioned lack of inventory; there are five condos currently on the market in the entire valley. 

As a whole, there are 59 homes, condos, and PUDs on the market right now in the valley. Of these, 17 have had price reductions; this is indicative of the “normalizing” we have been seeing, due to interest rates, holidays, and lack of inventory. It’s refreshing to see one to three homes currently available in each of the valley’s most popular neighborhoods, including Skytt Mesa and Sunrise Village in Solvang, and Sycamore Ranch and Meadow Ridge in Buellton. 

Goleta

In Goleta, 183 homes/PUDs sold in 2023. This is down over 40% from an average year when we could expect about 350 home sales in Goleta. 

The homes sold ranged in price from a 1/1 PUD near Goleta Valley Cottage Hospital to an $8M 22-acre ranch in the Goleta foothills, sold by my team in October. This plus a handful of sales between $4M and $5M pushed the average sales price up in Goleta to $1.7M, with a median price of $1.5M. This is in line with 2022, where the sales prices were nearly identical. 

Just five years ago, the average sales price in Goleta for a single family home was $1,049,000, with a median sales price of $923K. 

Condo sales in Goleta landed at 85 for the year, ranging in price from a 1/1 in Encina Royal for $515K to a 3/3 at the Tree Farm for $2.2M. On an average year we’d expect the sale of about 200 condos in Goleta, so the numbers are down significantly. 

Goleta tends to attract entry-level buyers – i.e. more likely to be borrowing funds – in most neighborhoods, so the increasing interest rate in 2022 and 2023 severely impacted the number of sales in the area. 

There are currently 42 homes, PUDs, and condos on the market right now in Goleta, and an additional 25 are in escrow. 

Santa Barbara

On par with other areas, sales in Santa Barbara proper were down from 2022: 492 homes and condos sold in 2023 compared to 626 sold in 2022. Pre-pandemic, sales hovered around 800 homes and condos in Santa Barbara per year. 

Average and median prices were both down: the average sales price for single-family homes was $2.375M in 2023, compared to $2.5M in 2022. Median sales prices dipped $2.185M in 2022 to $2.08M in 2023. 

The range of homes and condos sold in Santa Barbara was vast; the least expensive property sold was a one-bedroom, one-bathroom condo on Richland Drive for $547K. The most expensive home sold in Santa Barbara was an ocean view property on Shoreline Drive with five bedrooms and seven bathrooms, closing at $16,200,000 after 184 days on the market. Not surprisingly, the highest price sales in Santa Barbara are oceanfront properties above the bluffs along the beach, or ocean view homes in the Santa Barbara foothills. We also saw several high-priced sales in the Upper East, the Riviera, and in Mission Canyon. 

My Predictions for 2024

I’m expecting that 2024 will bring increased inventory, increased sales, and increased movement in our local markets, which is a good thing! It’s expected that interest rates will drop below 6% by the end of 2024, which will bring more buyers into the marketplace and could push prices up. However, a lower interest rate will also serve to bring more sellers into the market, and I foresee inventory increasing in all areas. In just the last two weeks we’ve already seen a marked increase in new listings, buyer activity, open house attendance, and pended listings. 

As always, a buyer can set themselves up for success by being pre-approved with a local lender, and moving quickly when they see a home they want. Sellers will need to be realistic when setting the price for their home, pricing in accordance with comparable sales and remembering that the true peak of the market was May 2021. Strategy is everything in this nuanced market, and pricing at market value or slightly below may give you the best chance of getting the best price for your home.