happy 2023 YEAR END REPORT

Hello Family and Friends -

It’s a Wrap - The 2022 Real Estate Market is in the books and it was an interesting year to say the least.

Let’s start with what is remarkable—2022 brought record setting transactions with two eye-popping sales above $50M. One an oceanside compound in the enclave of Padaro Lane in Carpinteria and the second a noteworthy estate on Picacho Lane in Montecito. Additionally, a home on Hot Springs Road in Montecito traded for $36M and five more homes traded above $20M. I think we can confidently say that demand to live in our exclusive piece of the breathtaking Central Coast is high on the list for many accomplished, affluent individuals. Read on for trends, detailed year end stats, graphs and properties that are currently available that we feel are good values—and reach out for more details.

Simultaneously to the extraordinary sales, we have seen some significant price reductions in the Luxury Market—often due to over ambitious original list prices. Regardless, Montecito and Hope Ranch are still defying national trends and continue to increase in value. We ended the year with 210 sales in Montecito which is in line with 2019/2018 when we had a more “normalized” market. Of the 15 December sales, 8/53% sold off market. In the much smaller (but equally desirable) community of Hope Ranch, we saw 28 sales during 2022. More local 2022 Trends/Highlights on the next page.

Overall in Santa Barbara, the first quarter of 2022 started out on a robust pace with homes still receiving multiple over-ask offers and the median sales price reaching the highest level in 15 years. There was a shift during the remainder of 2022 with slowing number of sales and low inventory, while prices remained steady. We all saw what happened starting in May when the Federal Reserve stepped in and interest rates climbed. The market slowed noticeably and buyers who need a loan watched their buying power diminish (as illustrated in the graph below that clearly shows how higher rates lead to a big drop in transactions locally). Comparatively, the stock markets unpredictability has also impacted many cash buyers who are watching their investment portfolio decline. Nevertheless, 38% of total transactions were “All Cash,” in Montecito 48% and Hope Ranch 46%.

National headlines are reporting that the real estate market is correcting/declining, but that’s not necessarily the case in the Montecito/Santa Barbara area. We often remind our clients that real estate is hyper-localized and we personally have several qualified buyers actively looking to purchase. What’s happening in other areas of the country does not always correlate to the neighborhood you may own in or be looking for a home in. Inventory may be in short supply, but the Santa Barbara Coast remains highly desirable and there are more buyers who want to purchase than properties available for sale so prices remain stable.

After roughly two years of a pandemic fueled market frenzy all across the country that brought prices to all time record heights, it felt like the housing market escalation would never stop. Could 2023 bring some normality to the real estate market? Let us know your predictions!

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