Mid-Year Market Update

As we approach the middle of 2024 and the end of Q2, it’s notable that as of this writing there are currently 192 homes and PUDs (planned unit developments, i.e. single-family homes within an HOA) on the market in the South Coast of Santa Barbara, which spans from Goleta to Carpinteria. We have not seen inventory this high since October 2020, when the real estate market was extremely active due to 3% interest rates, work-culture shifts due to the pandemic, and an influx of new buyers in our area, again, driven by the pandemic. This is very welcome news for homebuyers, who have been challenged with low inventory, high prices, and high interest rates for the last few years.

Median sales price remains high: $2.25M year-to-date through May, which is up from $2.1M in 2023. The average sales price YTD is $3.5M, which is up 6.7% from 2023. 

In May we saw the closing of 81 sales of single-family homes and PUDs, which is the exact same number as April. This is really encouraging, as we are seeing sales numbers pick up across all price points compared to earlier in the year. This indicates a healthier market all around: When inventory and sales both increase, it means both sellers and buyers are active in the marketplace, which is ideal. 

Year-to-date, we’ve seen the closing of 518 homes, PUDs, and condos on the South Coast. In 2023 that number was 461, in 2022 that number was 584, and in 2021 it was 814. In a pre-pandemic year, we’d expect to see about 575 homes close in the first five months of the year. We are inching our way back to normalcy. 

One of the key markers that indicates the heat of the market is the number of days on market, or DOM. The average number of days on market at the end of May was 34 days, which is slightly higher than what it was last year (28). This bump in DOM allows inventory to accumulate more than last year, but buyers should still be aware that well-priced, appealing homes are still selling with multiple offers. 

Prices Still Rising 

Our median sales price – reflecting only the sales in May 2024 – was an impressive $2.6M, compared to $2.3M in May 2023 and $2.1M in May 2022. This is due in part to a handful of high-end sales, including a $21.5M sale on Padaro Lane. 

The continued rise in values shows that we still suffer from basic supply and demand issues in the Santa Barbara area: We have a backlog of pent-up buyers who are still searching for a home, and nearly 40% of sales in the last month were cash sales; those buyers are not affected by the current 7% interest rate. On the supply side, even though we are enjoying more inventory than in the last few years, we are still well below what would be considered a “normal” buying and selling environment. 

Right now we have 233 homes, PUDs, and condos actively listed and not in escrow. In pre-pandemic years, it would be expected that we’d have 500 properties on the market by the beginning of the summer. 

Condo Sales Stable 

Let’s look at condos: so far this year there have been 119 sales in the South County, compared to 112 last year. Active and new listings are up, while median list price and average sales prices are down. The median sales price for condos is now $925K, compared to $915K this time last year. The median list price ($924K) is lower than the median sales price, reflecting the multiple-offer situation on the majority of new, well-priced listings. 

The number of days on market in the condo segment remains similar to last year: 29 days on average. This number was nearly half (14) in both 2022 and 2021. The luxury condo market has slumped this year, with only five luxury condos trading hands. Last year there were 8 in the same time period, and in 2022 that number was 18. 

Average Sold Price in Montecito Continues to Climb 

Thus far in Montecito, we’ve seen the sale of 54 homes and condos in the MUS and Cold Spring School districts, which is nearly the same number as last year. In 2022, that number was 103, and in 2021, it was 174. Sales ranged from a $1.7M 1-bed/2-bath condo on Fairway Road to a $36.8M sale of a 19,000-square-foot estate on Park Lane.

Median sold price in Montecito for the first half of the year is $5.8M, up from $5M in 2023. Average sold price is $8.7M, up significantly from $6.5M. The first half of the year there were nine sales over the $10M mark, compared to 10 sales in the same timeframe last year and a whopping 14 sales over $10M in 2022.

Notable sales include 303 Meadowbrook Drive, which closed for $9.6M after 455 days on the market; 1530 Mimosa Lane sold in March for the third time in four years; and a home on Santa Elena Lane sold in February for $8.5M, making it the highest-priced sale in Montecito Oaks, ever. 

The condo market in Montecito has been extremely slow, with only three condos trading hands so far this year. Last year that number was nine. The sales this year included a condo in Bonnymede, one in Montecito Shores, and one on Fairway Road. Average number of days on market for these sales is 18; condos in Montecito are a hot commodities these days. 

Santa Barbara Sales Soar

Sales are healthy in Santa Barbara proper so far this year, with 255 homes, PUDs, and condos selling as of press time. This is compared to 216 in the same time frame last year. Sales ranged from a $710K 1/1 condo on State Street at Alamar to a $9.1M home on Mission Ridge. 

The median sales price in Santa Barbara is $1.8M, and that does not include Hope Ranch. In Hope Ranch, sales slumped; there have been only eight sales in the semi-rural enclave so far in 2024. Normally we’d see about double that number of sales. In Hope Ranch, the median sales price is $6.3M, compared to $8.4M last year. There are currently 12 homes for sale in Hope Ranch, with two others pending sale. 

In Santa Barbara, there are 99 homes and condos currently on the market. Less than a neutral market, but more than we’ve seen in over two years. 

Goleta Impresses 

The market in Goleta remains strong, thanks in part to some sales on the higher end. The average sale price in Goleta year-to-date is $1.6M, compared to $1.4M last year at this time. There have been 143 total sales so far this year in Goleta, compared to 118 in the same time period of 2023. In 2022 there were 207 sales. Again, we are creeping up to a more “normal” year. 

Goleta sales prices continue to impress; there have been a staggering 30 sales over the $2M mark, compared to 18 last year at this time. Hot spots for this kind of activity include Vista Del Rey, San Antonio Creek, Sierra Madre Heights, The Bluffs near the Ritz Carlton, and a few neighborhoods in the Mountain View and Foothill School Districts. 

Santa Ynez Valley Inventory Increase

In the Santa Ynez Valley we saw the sale of 72 homes, condos and PUDs in the first half of the year, ranging in price from a $435K, 1/1 condo in Solvang to a 71-acre horse ranch in Santa Ynez for $14.7M. In 2023 there were 119 sales in the same time frame. 

Prices in the Valley are up over last year: the average sale price is $2.2M and the median sale price is $1.5M. On average, homes in the Valley sell for 95% of their list price. Buellton specifically has seen a healthy 31% bump in median home prices: the median home price at the end of May was $1,147,000. 

The average number of days on market in the Santa Ynez Valley has increased to 76, compared to 56 last year. Inventory is also increasing, and there are currently 76 homes and condos for sale; last year at this time there were about 20 fewer homes available. Overall in the valley we have a five-month supply of homes, which is higher than we’ve seen in years. Anything less than a six-month supply is considered a seller’s market, and we are definitely seeing the shift to a more neutral market. 

What’s Really Happening Out There 

The mid-year numbers accurately reflect the experience of buyers and sellers in our local market: There has been a palpable boost in inventory and it’s a refreshing change. If you talk to any active realtor in the Santa Barbara area, they’ll likely tell you that the market, which has strongly favored sellers for over two years, is loosening up for buyers, giving more opportunities to get into the market. That being said, the lower-end segments (under $2M) are still extremely active, and many properties are still garnering multiple offers and selling at or over list price. Remodeled, turnkey properties are selling for a premium, with buyers preferring to pay for upgrades rather than do the work themselves. 

In addition to selling property, agents and brokers will likely be spending their summer training for new real estate contracts and paperwork that will launch in August, in conjunction with some new rules regarding commission and disclosure that will go into effect August 17, 2024. The practice changes aim to increase transparency in real estate transactions, which is a positive change for sellers, buyers, and agents alike. For more information, feel free to contact me or your trusted realtor.