What is happening on the real estate market? | opinion

A few years ago I heard a real estate analyst give an idea of ​​the dynamics in a market. He waited for the momentum to change. He likened it to throwing a soccer ball, he climbs and climbs until he reaches the top of the arch, and then he falls and falls until the ride is over. His thought or theory was that the first sign of market change occurs when momentum wanes.

I liked the theory, saw it true in one market and not another, but it gives me food for thought. Today it feels like the dynamic is changing. We still have a lot of buyers and houses are selling fast, but some people might be wondering could our market change?

Since May 2020, our real estate market has seen very little headwind as it has reached record highs. Prices have gone up so fast and our sales volume has been second to none. The vast majority of homes sell as quickly as sellers are willing to review offers.

The stock is now growing a little. In the last few weeks our total number of available houses and condos between Carpinteria and Goleta has grown. Not hard to do when it was that low. For the last three weeks, May 10th, 17th and 24th, we had 141, 142 and 153 available homes and condos for sale respectively.

This is still very low and only equates to about a month’s supply of homes, but in percentage terms it’s decent growth as our inventory has averaged around 100-110 homes over the last few months.

The supply volume is also falling. When we say the dynamic could change, don’t get us wrong, properties still get multiple offers while others don’t. The total number of offers is declining. We are noticing that some accommodations are not as busy as expected.

A house in a coveted neighborhood received 17 offers about six weeks ago. Two weeks ago, a very similar property in the same neighborhood received only two offers. This surprised us, but should also be tempered. In a normal market, any number of multiple bids is great. Even a house that is signed in the first few weeks is historically very good.

We’re also noticing a few more price drops, which was very rare a few months ago. But two years ago price adjustments were quite normal even in a healthy market.

Overall, our country’s economic news has not been great. With record inflation, a weakening stock market, supply chain issues, rising interest rates, etc., could it cause our market to cool down a bit?

Over the years we’ve seen market pauses last a few weeks, then we find the sky doesn’t come down and it starts up again. But at the same time, historically, all markets are cyclical.

Our market remains active and multiple offers are still commonplace, but the market is starting to feel a little different.

We’ll have to wait and see what lies ahead.

Peculiarities of the Carpinteria market

As with the greater Santa Barbara area, real estate in Carpinteria generally continues to sell quickly, with buyers still outnumbering sellers.

Two notable changes have occurred. First, we’ve seen a few more homes that have been on the market longer. As prices went up and then kept going up, some houses don’t sell for the first week and then we see price drops. That was much more unusual a few months ago.

Second, we have more inventory. As of May 31, there were 21 houses for sale in Carpinteria, but no available condo. In a market that sells around 95 single-family homes annually, we have about two and a half months’ supply of homes. A few things to note about our inventory:

• 8 houses cost between $14M and $109M, a price point that doesn’t move that fast in Carpinteria.

• Only two houses cost less than $1.4 million

• A new development on Ogan Road, The Cottages has just come on the market with two houses on the market priced between $2.2 and $2.3 million. Three more houses will soon come onto the market.

We love talking about our local Carpinteria market. If you have any questions, please do not hesitate to contact us.

The market highlight in April

April Statistics (Santa Barbara County)

Since the beginning of the year | 2022

• Total sales: 545 in ’22 vs. 753 in ’21| 28% decrease

• Total Home Sales: 378 in ’22 vs. 535 in ’21 | 29% decrease

• Total Condo Sales: 167 in ’22 vs. 218 in ’21 | 23% decrease

• Average home price: $2,300,000 in 22 vs. $1,900,000 in 21| 21% up

• Average Condo Price: $896,000 in 22 vs. $819,250 in 21| 9% up

• Sales over $5M: 62 in 22 vs. 66 in 21 | down 6%

April 2022

• Total Sales: 136 in ’22 vs. 219 in ’21| 38% decrease

• Pending sales: 134 in ’22 vs. 197 in ’21 | 32% decrease

• Total OTC sales: 25 sales | 18%

• Total cash sales: 31 sales| 23%

• Average 30-year fixed-rate mortgage: 5.25% as of 27-May-22

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