After two years of robust Santa Barbara home sales and unprecedented price escalation fueled by the “pandemic paradigm shift” 2022 reverted to a market of more balance and normalcy. While the median price continued to increase at a modest pace, the total number of sales dropped significantly from the previous 2 years. The final tallies in the Riviera/El Cielito/Eucalyptus Hill neighborhoods showed a 29% decline in the number of homes sold and a 22% increase in the median price to a new all-time high of $3,300,000.
Now that I have analyzed the final numbers for 2022 it is apparent that the market did not begin to shift until after the first quarter. The first three months of the year produced 26 sales and a 15% increase in the median price. Starting in the spring the pace of sales began to decrease and selling prices stabilized. The Santa Barbara luxury home segment of the market continued to perform well, which accounted for a slight increase in the median price throughout the year. However, as the market stabilized many listings lingered on the market and sellers had to adjust their prices to achieve a successful sale. The other significant trend is that the inventory of homes for sale began to dwindle. This resulted in an anemic fourth quarter that produced only 12 sales along with the continuation of a modest “seller’s market”.
As we enter the new year it is apparent that the demand for Santa Barbara homes and estates continues to be active even though prices and interest rates have escalated. Buyers, however, are much more selective and price sensitive and typically will not pursue overpriced properties. Therefore, the key ingredient for a robust and balanced market is a good flow of well-priced listings throughout the year. If you are considering selling your Santa Barbara home keep in mind that even though there has been a shift, it is still a “seller’s market,” and prices are at an all-time high.