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January 2023 | Issue No. 22

2022 Yearly Review

1/26/23

From a frenzy in the first half of 2022 to an adjusting market in the second half, 2022 was quite the year! Despite multiple interest rate hikes, the local residential real estate market ended the year with impressive appreciation numbers. The median and average sales prices for single-family residence in South County (excluding Montecito and Hope Ranch) increased 17.4% and 21.8% respectively. Similarly, condominiums enjoyed rates of 16.5% and 19.5% respectively. Montecito, on the other hand, saw lower but still impressive gains at 9.6% and 13.7% respectively.

The rise in interest rates coupled with increased concerns about a recession has caused many buyers to pull back and take a more “wait and see” stance. This, in turn, has cooled the frenzy quite a bit, affording those buyers who are committed to purchasing a home now a little bit more breathing room and opportunity to actually get their offers accepted.

Sellers, on the other hand, who would have wanted to make a move last year didn’t because of concerns about few choices caused by limited inventory, and, for others, capital gains, now have one more challenge keeping them in their homes: their current low interest rates. As a result, we have homeowners at both ends of the spectrum who want to move but are struggling to make that happen. That spectrum ranges from first time home buyers who purchased say 7 years ago and who have outgrown their homes, to empty nesters who no longer need or want their large homes. The desire to make a change is genuinely there but reasonable options have been eluding them. It feels like a sort of supply stagnation. As a result, both the number of New Listings and Sold Listings are down considerably: 21% and 30% respectively for single-family residences in all areas (excluding Montecito and Hope Ranch); 41% and 48% respectively for single-family residences and PUDs in Montecito and 28% and 36% respectively for condominiums in all areas.

Inventory on 1/26/23 for single-family residences is still very low at 2 months and 12 days. Similarly, condominiums are at 2 months of inventory. Only 3 days ago, Montecito was showing 8 months of inventory (a buyer’s market) but with 3 additional sale pendings since then, that number is now down to 4 months and 24 days. 83.3% of those listings are over $3,000,000!

To learn more about how you can accomplish your homeownership goals in this market, please give me a call at 805.689.1300 or email me at [email protected].

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Buying and selling a home is more than just a transaction. It is a process that involves identifying your dreams, goals and objectives, creating a plan and rallying a team of best-in-class advisors to support you along your path from vision to reality.

I look forward to supporting you in this exciting dream-building journey and earning your trust and friendship for years to come.

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