At my open houses over the weekend, I was repeatedly asked about the market as I’m sure most Realtors were. There is a sense that things are changing, and indeed they are.
We had a remarkable summer with sales and prices increasing at rates we never expected. It was a frenzy in the under-$1-million market and under $2 million in Hope Ranch and Montecito, with multiple offers and overbids on more than 25 percent of the listings.
What’s happening now? There is always a natural slow down this week as people’s attention shift toward students returning to school and the holiday weekend, but we have an added dimension giving some buyers pause.
Not only are buyers fatigued from the fast market, but prices have increased as have the mortgage rates in a relatively short period of time; 30-year mortgage interest rates were in the mid-3s a few short months ago and now they’re in the mid-4s. These are still historically low rates, but obviously, this is going to have an impact.
Buyers are taking time to reassess how much they can afford. People buy based on their monthly payment, and this transition time requires some math and budget reflection. It’s a healthy adjustment period for people who are most likely making the biggest investment of their lives.
That being said, we are still experiencing a robust response to well-priced and well-presented properties. There is pent-up demand for inventory, and there are still more people who want to live in Santa Barbara than we have houses to sell them. Maybe that desirable property is only getting three offers instead of 10, and not all of them are cash. This is great news for a lot buyers who have traditional financing and were getting beat out by investors.
The market is moving at a more manageable rate now, which is good for long-term recovery and growth. It’s a great time to buy and sell as we transition to a more sustainable phase of the market. Contact your local Reatlor to get further information and advice on our local real estate market.
— Laurel Abbott is a real estate agent with Prudential California Realty and president of the Santa Barbara Association of Realtors. Contact her at laurel@laurelabbott.com or 805.879.8050. The opinions expressed are her own.