While not much changed in the third quarter in terms of the continuation of low inventory, the Santa Barbara Riviera real estate market did experience a modest increase in the number of sales compared to the first two quarters of 2023. What really stands out in analyzing the statistics, however, is that the value of Santa Barbara homes is on the decline. In fact, the median price for the third quarter dropped below the $3 million mark for the first time since 2021.
The Riviera/Eucaplyptus Hill/El Cielito neighborhoods produced a total of 20 sales with a median price of $2,950,000, which represents an 18% price decrease in the past 6 months. We are still witnessing an interesting dichotomy in the market in which about a third of the homes for sale are in high demand and getting bid up in price while most of the listings are lingering on the market for several months and eventually selling well below the original list price. Another interesting trend is that the Santa Barbara luxury real estate market performed particularly well in the third quarter. In the $6 million and above price category, there was a total of four properties that changed hands at or close to the list price and in a relatively short period of time on the active market.
As we move into the final three months of the year it will be very interesting to see what direction the market is heading. As I mentioned in my last report, the overriding trend currently in the Santa Barbara real estate market is low inventory. Until recently, this dynamic has helped to prop up home prices and generally favor sellers over buyers. However, as we witnessed in the last few months, there now appears to be downward pressure on prices along with buyers beginning to hold the upper hand in negotiations. To be a successful seller in this market, it is now critical to adopt a pricing and marketing strategy that will get the attention of buyers that have become more patient and selective.