Hold On… The Market Is Shifting 🏡

The early spring market is starting to take shape—and it’s been an interesting one.

First, the weather… nearly 100 degrees in March? That’s not something we see often in Santa Barbara ☀️

The real estate market had been building momentum:
• Interest rates dipped below 6%
• Inventory was increasing
• Buyers were re-entering the market

At the same time, sellers were still pushing for top dollar—and in some cases, still getting it.

Then uncertainty hit.

For a couple of weeks, buyers paused. Since then, activity has picked back up—but with more caution and less certainty about what’s ahead.

Here’s what we’re watching:

📉 Mortgage rates have ticked back up
⛽ Rising oil and gas prices may impact buyer activity
🏦 The Fed has held rates, signaling caution

These factors could create a slower market in the short term.

At the same time, they may also motivate more sellers to come to market—bringing us back to the key driver: supply and demand.

We’ve already seen some pricing shifts. The median sales price dropped about $180K from January to February (though Santa Barbara data can be skewed by luxury sales in Montecito and Hope Ranch).

What I’m seeing on the ground:

✨ Updated, turnkey homes are still commanding strong prices
🔧 Fixer properties are sitting longer—and selling at discounts

Examples:
• A remodeled home on Camino Cerralvo closed $300K below asking—but still set a neighborhood record
• A fixer in Goleta sat for months, and my buyers negotiated over $170K off the original price

Buyers still want to be here. They’ll make trade-offs—smaller homes, less ideal features, or homes needing work—but only to a point.

At the end of the day, buyers are paying for perceived value:
✔️ True, modern remodels (not outdated renovations)
✔️ Added functionality (ADUs, better layouts)
✔️ Strategic pricing that creates urgency

If you’re curious how this applies to your home—or your next move—I’m always happy to connect.

Santa Barbara Struggles To Meet Housing Goals With Only 11% Completed So Far

A Rare 1,000-Acre Coastal Ranch Near Santa Barbara Lists for $70 Million

Mortgage rates increase for 3 straight weeks

'Craziest time I've ever seen:' Calif. real estate agents feeling whiplash amid global uncertainty

'People might start to feel a little bit more hesitant'

California real estate was poised to pick up during what’s normally the busy spring season, but experts suggested the market could slow with significant hurdles ahead. 

Mortgage rates dipped to their lowest level in three years at the end of February at just under 6%, only to tick back up to around 6.3% last week. That may seem like a minor shift, but it’s part of a “huge amount of volatility,” largely driven by the conflict in Iran that’s pushing more economic instability, Chen Zhao, the head of economics research at Redfin, told SFGATE.

It’s led to higher gas prices, and some customers are now rethinking some home purchases. 

“Nothing affects consumer sentiment like gas prices,” Zhao said. “So people might start to feel a little bit more hesitant, and that can certainly affect the housing market.”

It won’t be clear how much these global forces will affect the housing market until months from now, when analysts can look back at the data. Still, real estate agents said it has made it more difficult to make predictions for home buyers and sellers. “It’s the craziest time I’ve ever seen,” Matt Sevenau, a Compass agent focused on Wine Country, told SFGATE. “It’s so impossible to even have any idea how this plays out.”

Home sales hit their lowest level in 23 months in January 2026, according to the most recent market report from the California Association of Realtors. 

In a recent Redfin survey, 25% of Americans said they are “delaying or canceling plans for a major purchase like a home or car because of the military conflict with Iran.” The survey was conducted by Ipsos on March 5 and 6, about five days after the U.S. and Israel launched a war against Iran. The war is causing a level of concern similar to that brought by the Donald Trump administration’s institution of new tariffs in 2025. Redfin did a survey that year to gauge consumer confidence, and 24% of Americans said they were pausing purchases.

In places where inventory is especially low and the market is hot, the uncertainty is making buyers “a little more picky,” said Ilana Minkoff, a real estate agent with Vanguard Properties in San Francisco. She said luxury buyers in San Francisco, who often pay in cash, are still jumping at turnkey homes and sometimes offer far over the asking price. But given the uncertainty with prices in construction and the global supply chain, she said potential buyers aren’t as interested in fixers or homes that need renovations as they once were. 

The housing market has weathered a lot of ups and downs in recent years. Minkoff said in low inventory markets, like so much of California, it still feels like a race for buyers and sellers. “Here we are in another crisis, and the perceived value of a home is very important because that’s stability,” Minkoff said. “... In uncertain times, it is important to live in a place that you love.”