A Look at First Quarter 2023’s Unique Local Real Estate Market

Real estate housing statistics are making national headlines again with the National Association of Realtors® (NAR) reporting home prices are down slightly and the number of home sales are down significantly across the nation. We like to think we’re unique here in Santa Barbara. Indeed, our South County real estate market differs from the U.S. in some ways and can also follow the national trends. Here’s a recap and analysis of the real estate market’s first quarter 2023 for the areas between Goleta and Carpinteria.

How many homes are selling?  NAR reports existing home sales declined a whopping 22 percent nationwide from a year ago for condos and houses combined. Santa Barbara has that beat. Sales are down almost 40 percent from the 12 months prior. Keep in mind that from mid-2020 to mid-2022 (the pandemic surge), sales here were very robust and among the highest we’d seen in a decade and a half, so some of the difference between this year and last is because those pandemic years were a frenzy for home sales. In the first three months of this year, only 220 homes closed escrow (half of what we saw in the first quarter of 2021); however, that is partially due to January and February 2023 being particularly sluggish for sales. March was busier with 89 sales, and April is keeping a similar pace, so we expect our number of home sales to continue to increase. Although higher prices and interest rates are deterring some buyers, one important factor in this low number of sales is that there just isn’t much to buy. The number of homes for sale, called “inventory,” is still very low. 

Are properties still selling quickly?  In 2021, an amazing 97 percent of listed houses sold (smashing the record of 88 percent set the year before), and in 2022, 93 percent of houses that came on the market closed escrow. The months-of-inventory (MOI) figure you see in the chart is a calculation showing how long it would take for all the listed homes to sell at the current rate of sales, if no new homes came on the market. Right now, that is 1.2 months for all properties. It’s just 15 days (0.5 months) for condos! An MOI under three months is considered a strong advantage to sellers (a sellers’ market). Still, it’s a little easier for buyers now because last year at this time, houses were selling even faster: There were only 18 days of inventory across the board and just three days for condos! If you were hunting for a condo last spring, within three days, all the condos on the market would be gobbled up by new buyers. Now it’s 15 days. Slightly easier, but still tough, for condo buyers — and still very propitious for condo sellers. Nationally, there are 2.9 months of inventory of houses and condos, up slightly from the national average a year ago.