Montecito & SB Real Estate Update Amid Covid-19
It goes without saying that the last few weeks have been a tumultuous time for everyone, and the global pandemic and associated social distancing and quarantines have had far reaching consequences for nearly every type of trade or commerce. The local real estate market in Santa Barbara and Montecito is no exception; here’s what’s happening in Montecito and beyond.
Many sellers have chosen to pull their listings from the MLS, either withdrawing them temporarily or canceling them completely. There have been 61 homes/condos canceled or withdrawn since March 1 in the South County (Carpinteria to Goleta), with 23 of them in Montecito, ranging in price in the 93108 from $1.3M to $42M. We’ve seen several closings in the past three weeks as well, and fewer sellers are listing their homes in this time of uncertainty. This has created an even tighter level of inventory for buyers who are still actively looking. As of this writing, there are 455 active home, condo, and PUD listings from Carpinteria to Goleta, with 148 of those in Montecito. Before the pandemic took hold in the United States, the number of active listings in the South County hovered in the mid-500 range.
Buyers are still actively looking and submitting offers, thanks in part to record low interest rates. Seasoned buyers who are locked into their rates from earlier this year are trying to solidify a home in order to benefit from the dip; while new buyers may be finding that interest rates have increased slightly from two weeks ago. The volatility in the stock market has bled into the mortgage market, and mortgage lenders report that rates are fluctuating not just daily, but sometimes hourly.
There have been 57 homes that have gone into escrow since the beginning of March, with a median list price of $1.2M. That is about 64% of normal activity; in the same time period last March (March 1-March 24), 88 homes went into escrow. In Montecito alone, we’ve seen 10 homes go into escrow, ranging in price from a $1M Fairway condo to a nearly $12M estate on Cold Springs Road, which had been on the market for over 500 days. In the same time frame last year, there were 14 homes that went in to escrow, so we are at 70% of what we would consider “normal” activity in Montecito.
Some homes in the lower price points in Santa Barbara and Goleta have gone pending with multiple offers, which we were seeing a lot of before the pandemic crisis. At this point we cannot surmise how this crisis is going to affect sales prices. Once the homes currently in escrow are closed, we will have a greater understanding of how our median home price has fared during this unprecedented time.
We are seeing a handful of listings come on the public market via the Multiple Listing Service every day; 21 listings have come on the market in Montecito since March 1, compared to just 16 that came on the market in the first three weeks of March in 2019. In the entire South County, there have been 109 new listings since March 1. Last year in the same time period there were 131, which is a 17% drop overall. There are many listings that are being held “quietly” by local agents, so as not to accrue days on market and not visible to the market at large, including on websites like Zillow and Redfin.
The California Association of Realtors has mandated that agents no longer hold brokers’ tours or open houses, and are strongly suggesting that all showings are done via video chat. The Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to allow lenders to utilize “desktop” and exterior appraisals only, lessening the requirements of traditional appraisals. Last week, the California Association of Realtors also released a Coronavirus addendum/amendment, which can be used in both new transactions and existing transactions, if agreed upon between both seller and buyer. The form offers sellers and buyers the ability to clarify what will happen to their transaction in the event that the coronavirus crisis causes either party to be unable to close escrow as planned. It also allows both parties to agree to cancel the agreement if the buyer is unable to obtain a loan due to new financial circumstances related to the crisis.