Quarter 1, 2024 Started the Santa Barbara Region's Real Estate Year Off Comfortably.
The first quarter of 2024 (yes, summer is just around the corner) continued to see forward momentum in our local communities, with a noticeable downturn in the number of properties selling despite numerous off-market sales. Prices kept pace with demand, and inventory continued to be a drag on increased activity.
Montecito
Montecito currently has 51 active listings, including my new listing pictured above, Casamar: An Extraordinary Mediterranean Estate, with 45 properties closed or pending in Q1 2024. For Q1, average and median sales prices rose 64% and 21% respectively, with average and median list prices following suit, with gains of 26% and 43%. It is not surprising that sales numbers slipped to 15 units due to lack of inventory, which declined by 24%, while the time properties took to sell rose 59%, to 51 days.
Santa Barbara
Santa Barbara had 113 closed or pending properties in Q1 2024 and currently has 69 properties available for sale, including Sea La Vie: A beautiful Mediterranean-style home in Santa Barbara. Gains in the average list and sales prices also rose, but less dramatically than in Montecito. These rose 4% and 11% year over year, while the number of properties sold rose 22% due to an increase in inventory levels, which rose 25%. Similar to that in Montecito, the time it takes for a property to sell also rose by 42%, to 54 days.
Hope Ranch
Hope Ranch has 1 property currently for sale, with 3 properties either closed or pending in 2024. The enclave had sizable declines in the average and median list prices: down 41% and 32% respectively, with average and median sales prices rising 10% and 12% year over year. The drastic lack of inventory, down 95% year over year, has led to a corresponding drop in sales, which was also down 75% year over year. This may also be due to market factors such as interest rates, but, the time a property took to sell also fell drastically as there were fewer options for buyers to choose from. The days on the market fell from 71 days to 10 days.
Important Questions
Of course, the question on everyone’s minds these days is all about the legal actions across the US as they relate to real estate commissions moving forward. Nothing has yet been decided, and final rulings are expected by the courts, with the first rulings due sometime in June of this year. Certainly, changes will be coming in how business is conducted, but, as has always been the case, commissions are never fixed and always negotiable. What will be determined is who pays the commissions. Whether sellers choose to do so, or if it becomes a buyer's responsibility, they do so by adjusting their offering prices to reflect the additional costs they will be paying. One thing that seems certain is that MLS listings will no longer allocate a buyer agent commission.
As always, there are pros and cons with these changes. One I have not heard anyone address is the effect it will potentially have on property tax revenue. If buyer agent commissions are removed from the transaction, the recorded sale price will be less, and as such property tax revenue will be reduced by 2%-3%. How the various agencies deal with the potential shortfall/loss in revenues has yet to be seen.
As always if you have any real estate questions, please feel free to contact me. Wishing everyone a dry and sunny rest of spring, I can be reached at 805-886-9378 or Cristal@montecito-estate.com.
Of Related Interest:
• Cristal Clarke Recognized Once Again By Leading Industry Publication
• Selling a Montecito Home: A Few Things to Consider
• What Makes Santa Barbara One of the Best Places to Live