2022 YEAR IN REVIEW
At Riskin Partners, we pride ourselves on delivering relevant information that goes beyond just the numbers, so let’s dive into what’s really going on in the market.
1. WE SAW A SHIFT IN THE MARKET AFTER Q1
Montecito saw a significant decline in sales after Q1. Buyers are not as frantic as they were over the last two years and have become more mindful of overall economic conditions. While interest rates certainly influence the overall market, there is less of a direct impact on the high end. More so, buyers are focused on their stock portfolio, economic conditions/forecasts, confidence in the market, and where prices may be heading.
2. PRICING IS SETTLING INTO ITSELF
The good news for our market is that prices have proved remarkably resilient despite the significant drop in the number of transactions. Montecito inventory remains quite low compared with current demand, and many buyers are waiting on the sidelines and are eager to find their next home. In addition, buyers are still willing to pay a premium for the right property. Typically, these are homes in A+ locations with a 2023 look and feel that do not need significant renovations. Properties that offer instant gratification remain in great demand!
3. THERE IS AN INVENTORY PROBLEM WHICH IS WHY SALES WERE DOWN
Limited inventory explains why the number of sales was down during Q3 and Q4. The first half of 2022 saw 41 new listings compared to 26 during the second half. While the lack of selection continues to be frustrating for buyers, it has helped prices remain stable. Montecito enjoys a year-round market, though Spring does tend to be the busiest time of year and is typically when we see new properties hit the market. We forecast inventory coming on; however current interest rates may disincentivize some potential sellers if selling means giving up a low rate only to trade into a higher one. That said, regardless of the market stats and current interest rates, life events continue to happen, and people are always on the move. Folks who start with a secondary or tertiary residence here often decide they need to be here more full-time and need something larger accordingly. Empty nesters decide they are ready for a different-sized living experience. Couples go through marital transitions and need to reevaluate their housing situations. We predict the market will indeed see new inventory, though we doubt that it will be able to keep up with current levels of demand. More and more buyers are mindful of pricing, but lack of inventory should continue to stabilize overall pricing. To paraphrase Dorothy Gale, there's no place like a Montecito home.
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