MARKET REPORT
There’s a lot of chatter about what’s happening in real estate. Without context, it could be easy to assume that it’s all doom and gloom these days. 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.
The reality is that our market is seeing a shift. The trajectory of 2020-2021 is now stabilizing, and the market is settling into itself as the rate of growth we had during Covid was not a sustainable long-term pace. What we’re seeing now is a market that feels more “normal”, something similar to strong markets of the past but not as frenzied and as panicked as 2020-2021. But don’t be fooled into thinking this market has softened! Prices have settled a bit, but demand remains high, and inventory remains low.
Below we address the three major real estate “rumors” going around:
1. The number of sales is down.
True. The number of sales is down over last year. Significantly. But so is inventory. It makes sense that there were fewer sales when there was less to buy. Also, as the world is opening up, more and more people are turning their focus outwards rather than so very homeward. If you’re like us, nearly everyone you know has been in Europe this summer “revenge traveling” after the last two years that kept us in. These extended holidays have also taken a large segment of consumers out of the market for the last few months. Perhaps it's only anecdotal, but time will tell if we see an even stronger market this fall.
Also, that’s not to say that we’re not still seeing sales now. We are - and across all price points!
2022 Q1 SALES, MONTECITO AND HOPE RANCH, ALL PRICE POINTS
69 sales. Total sales for Q1 38% down from 2021, but 35% up from 2020 and 81% up from 2019.
2022 Q2 SALES, MONTECITO AND HOPE RANCH, ALL PRICE POINTS
67 sales. Total sales for Q2 45% down from 2021, but 5.9% up from 2020 and only 9.45% down from 2019.
Considering we are still so short on inventory, these numbers are impressive.
TOTAL SALES MIDWAY THROUGH Q3 2022, MONTECITO AND HOPE RANCH, ALL PRICE POINTS
17 sales so far. For the same time periods in 2021, 2020, and 2019, we are down 59% from ‘21, 73% down from ‘20, and 41% down from 2019. We believe this is the result of low inventory and buyers traveling. Stay tuned for end-of Q3 data and come Q4, information and insight as to how the Fall affects our market.
ALL CURRENT INVENTORY IN MONTECITO AND HOPE RANCH
2. Prices are declining.
That depends. Montecito and Hope Ranch are still seeing multiple offers, though much less frequently. Properties are still going over ask, just not as often. Many things are still selling off-market or in the first week, but not always. Pricing and presentation continue to be the most important aspects of successfully selling a home. When those are not in alignment with what today’s buyers are looking for or with the recent comps, some sellers may need to adjust their prices. These are all signs of returning to a more balanced market and not an indication that the sky is falling.
3. The pandemic boom is over.
Potentially. And that’s not necessarily a bad thing. Balance is actually good for the market, which is what we want to move towards. Montecito and Hope Ranch remain incredibly desirable, and a long line of people still want to raise their families here, retire in our community, and vacation on our shores. Even if things “slow down,” our market remains incredibly appealing and an excellent value proposition compared to many other luxury markets.
Arguably the biggest change the pandemic brought to our market, and potentially others out there as well, is the ability for people to work more (maybe not full time but more often) from home. While our area has always been highly coveted by folks wanting to raise their families here, oftentimes, work life hasn’t enabled folks to be here full time. That has changed over the last few years, and we believe that change is here to stay.
In Summary
As real estate adjusts to the current climate, one thing remains the same: it’s still very much a seller’s market, so long as price and presentation align with market data. Don’t believe us? Ask any one of the agents you know if they would rather have a new listing or a new buyer in Montecito right now. That tells you everything you need to know.
Still have questions on the market? Thinking of your own change of address? For any and all things real estate-related, feel free to shoot us a note or give us a call!
