Mid-year 2021 Real Estate Stats Update

Six months ago I wrote that our inventory of homes for sale was the lowest I’d ever seen. It sat at 1.1 months of inventory — meaning that in just 33 days all houses listed for sale would be sold at the current pace of sales. This is usually somewhere between 3 and 6 months. Half way through the year 2021, our inventory is 0.8 months! That means in 24 days if no new homes or condos are listed, there will be no homes for sale in the south coast of Santa Barbara. This is unprecedented. And it’s mind boggling. There are many theories why this is happening, with three main points:

  • People want to be in their right homes now. The pandemic taught many of us that home is super important. And now is the time to make that happen. Feeling safe and settled became paramount.
  • Mortgage interest rates are near record lows, creating a strong demand to buy now.
  • People who are settled in their right homes have refinanced and feel secure — meaning there is not much reason to sell. Plus there is not much to choose from if you do want to sell, which keeps people in their homes and keeps inventory low.

This situation is NOT like the 2008 real estate market at all. Then we had a whole bunch of risky mortgages (no or low down payment, adjustable rate mortgages, super easy loan qualifications) and we do not have those now. It’s still time consuming and challenging to get a mortgage if you’re not an “A” credit risk. Almost all home mortgages are fixed rates since 2009, meaning there are no payment increases looming or balloon payments or negative amortization. And because prices have increased, there’s a lot of equity. Almost no one is underwater on their mortgage and has plenty of equity if they do need to sell, resulting in no distressed sales (short sales or foreclosures).

Check out the highlighted number in the table above. That’s the months-of-inventory number and it’s low low low. Because 2020 was an anomaly in so many ways, I’m going to compare these June 2021 figures to June 2019. Two years ago we had a total of 765 sales of houses and condos by this mid year point. This year, we have 1,005 sales so far this year. That’s 31% more than normal. For median price, we are up 45% in two years, from $1,100,000 for houses and condos combined to $1,600,000. Keep in mind part of this is because there are more homes selling in the luxury markets (Montecito, the Riviera, and Hope Ranch for example) and not all because of price appreciation.

If you are thinking of selling, now is definitely the time. Check out my selling strategies and give me a call. If you’re thinking of buying, don’t lose heart. I am still getting buyers into their new homes, it is often just taking longer. It’s good to take advantage of interest rates hovering around 3%, which you can keep for the life of your loan.

I’m typing this while on vacation, and I’ll be back in the office July 21. Reach out and let’s chat more about the market!


Kalia Rork

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