The California real estate market has shown signs of recovery in May, with home sales reaching the highest level in eight months and the median home price surpassing $800,000 for the second consecutive month. The market is demonstrating resilience and stability.
The Santa Barbara real estate market remains strong while interest rates hovers around 7%. On July 16, 2023, the current average interest rate for a 30-year mortgage was 7.14%. Source: Bankrate
All Cash purchases have picked up since last year here in Santa Barbara. All Cash sales for June of 2022 were 28%. This year for June was 40%, which may reflect the dramatic hike in interest rates this year.
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If the supply of housing is constrained and unable to keep pace with rising demand, prices tend to increase. This scarcity can create a sense of urgency among potential buyers, who may be willing to pay higher prices to secure a property before it becomes even more expensive. This increased demand due to limited supply can further drive up prices.
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Historically, the California real estate market has been known for its high prices and strong demand, driven in part by the state’s strong job market and desirable location. In recent years, the market has continued to be competitive, with low inventory and high demand leading to bidding wars and rapid price appreciation.
Overall, the California real estate market remains a dynamic and competitive environment, with strong demand, high prices, and tight inventory continuing to be major factors.
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Overall, homes in California are slightly less expensive than they were one year ago — but only very slightly. According to data from the California Association of Realtors (CAR), the median single family home sold for $777,500 in November 2022, compared to $782,480 in November 2021. Today’s significantly higher interest rates make that already-high price feel even less affordable.
This does not hold true across all areas of the state. For example, Fresno, Los Angeles and Orange County saw equally slight increases year-over-year, while the wine-country regions of Napa and Sonoma saw more significant increases.
Homes are also taking longer to sell, CAR reports. In October 2021, homes spent an average of 11 days on the market before selling. A year later, that number had more than doubled to 23 days on the market.
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It’s important to keep up with real estate trends if you’re looking to buy or sell. January’s housing market is likely to mimic December’s, which is good for sellers but not great for buyers. This post features Santa Barbara’s real estate market trends for December 2022, year-to-date statistics for the year, plus market trends for the last decade.
Home buying demand skyrocketed during the pandemic as interest rates collapsed and an influx of Americans started working from home. However, the Fed’s rate hikes have quickly spurred a reversal.
