As we step into the final quarter of 2023, we’re excited to provide you with a comprehensive update on the ever-evolving real estate market. Over the past few months, we’ve observed some intriguing trends that are reshaping the landscape and will likely continue to influence it in the near future.
Stablization of home prices is welcome news for prospective buyers who have been witnessing significant price surges from 2020 through 2022. As shown in the market snapshot below, Q3 2023 home prices closely mirrored those in Q3 2022, as did the average days on market.
Sellers Driven by Life Circumstances
An interesting shift we’ve noticed is that fewer homeowners are choosing to sell their properties by choice. Instead, we’re seeing an increasing number of sales driven by life circumstances such as death in the family, inheritances (trust sales), divorces, and other personal factors.
Impact of Interest Rates
With 30-year mortgage interest rates currently hovering around 8%, there’s a palpable sense of caution among both buyers and investors. These higher interest rates are affecting buyer affordability, pricing some out of the market, and causing others to adopt a wait-and-see approach. Even cash buyers are exhibiting more cautious behavior. Those who locked in historically low interest rates in the 3% range are particularly reluctant to lose that by moving.
Challenges for Entry-Level Buyers
Entry-level buyers face a dual challenge. Not only are the high interest rates squeezing their affordability, but the available inventory in this price range often requires renovation or significant improvements. Given the current high cost of construction, this is adding upfront expenses and stress for these buyers.
Santa Barbara’s Resilient Market
Santa Barbara has long been a coveted place to call home, thanks to its unique lifestyle. Recent developments, including the presence of tech companies and the rise of remote work, have further boosted the appeal of our market. As a result, Santa Barbara enjoys a cushioned position compared to the nationwide market. It typically experiences the effects of economic shifts later and recovers more swiftly from any widespread impacts.
In the world of real estate, it’s challenging to pinpoint the perfect time to buy or sell a home. However, what you can control is your choice of real estate professionals. It’s crucial to collaborate with a team that possesses an profound understanding of the market and consistently closes successful transactions. Calcagno & Hamilton Real Estate Partners holds the top position in the Santa Barbara MLS for the number of transactions, having completed more sales each year than anyone else for 6+ years. Whether your plans involve an immediate move or a transition in the coming years, preparation is the key to success, and we’re eager to assist you in getting started.
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