Published September 4, 2026

Fall Is Coming, But the Market Isn't Cooling Yet

Written by Justin Etherton

Fall Is Coming, But the Market Isn't Cooling Yet

🍂 Fall Is Here… Does It Feel Like It?

School is back, Labor Day has arrived, sports are in full swing, and somehow the hustle and bustle seems to be picking up rather than slowing down.

Fall is probably one of the busiest times of the year for our family. Between school, soccer, flag football, beach days, family time, and work, there doesn't seem to be much "falling" or slowing down happening around here. 😂

And honestly, the Santa Barbara real estate market feels pretty similar.

🏡 Is the Market Cooling Down?

Traditionally, we expect the real estate market to begin slowing as we head into fall.

So far, I'm not seeing it.

Homes are still selling. Some are selling quickly and receiving multiple offers. We're continuing to see strong pricing, even while buyers remain concerned about interest rates and the overall economy.

But that doesn't mean this is an easy market.

In fact, I'd argue that strategy matters more today than it has in a long time.

🔑 What Happens Behind the SOLD Sign?

A lot of what I do for my clients never makes it onto Zillow, Instagram, or a "Just Sold" postcard.

Last week, I had a buyer go into escrow on a home. Just four days later, we completed the inspection and she realized it simply wasn't the right property for her.

We acted immediately, got her safely out of the contract, and made sure her deposit was returned.

Was that the outcome we originally wanted? No.

Was it the right outcome for my client? Absolutely.

That's the job.

And that's just one example of what the last few weeks have looked like.

🔨 Preparing a home for market: Connecting sellers with trusted local contractors and visiting the property multiple times each week to make sure work stays on schedule.

🏘️ Navigating HOA issues: Helping a seller understand potential HOA litigation, how it could affect a future sale, and whether selling or renting makes the most sense.

💰 Solving financing problems: Helping a buyer find a lender willing to finance an older mobile home that other lenders wouldn't touch.

🏡 Getting homes ready to launch: We have two new listings preparing to hit the market while continuing to work with active buyers.

Real estate isn't always about opening doors and putting a sign in the yard.

Sometimes the most valuable work happens when nobody else sees it.

📍 Pricing Is Still Everything

Despite the challenges, the Santa Barbara market remains solid.

But buyers are paying attention.

The homes that create excitement are the ones buyers perceive as offering real value at the right price.

Price a home correctly and you can create urgency, competition, and multiple offers.

Miss the mark, and even a great home can sit.

As we head further into fall, I'll be watching closely to see whether the traditional seasonal slowdown finally arrives—or if Santa Barbara's market continues to surprise us.

If you're thinking about buying, selling, or investing, let's grab coffee and talk about what today's market means for you.

🍂 Enjoy Santa Barbara's Secret Summer!

— Justin
Etherton Real Estate Group

Santa Barbara Board Approves 25-Unit Housing Project on West Los Olivos StreetSanta Barbara Board Approves 25-Unit Housing Project on West Los Olivos Street
EdHat Newsroom

A proposed housing project at West Los Olivos Street received final design approval after the City of Santa Barbara Architectural Board of Review considered updates to the development and discussed concerns.
The housing project at 515 West Los Olivos Street calls for demolishing an existing single-family home and a detached building and replacing them with a three-unit, two-story building and a 22-unit, three-story building. It would involve a total of 25 residential units.

The project will have no vehicle parking space, but will have 16 bicycle parking spaces.

Five units, accounting for 20% of the units in the larger building, will be deed-restricted for low-income families.

Since the project is proposed under SB 330’s Builder Remedy provisions, it is exempt from complying with the city’s general plan and zoning standards. The exemption allows the building to have a density that is typically not permitted.

Under the city charter, the project cannot be denied unless there are documented health and safety hazards.

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Read the Full Article Here!

Odds of a rate hike now 50-50 following Fed governor's speech
Real Estate News
Dave Gallagher
Christopher Waller said the Fed shouldn’t hike short-term interest rates unless inflation worsens. Mortgage rates, however, are still rising for now.

For anyone watching mortgage rates, it's been a discouraging week. But one Federal Reserve governor is offering a more optimistic outlook ahead of the upcoming Fed meeting.

Inflation will likely determine the Fed's next move

In remarks given at the Reuters NEXT Newsmaker event on Sept. 3, Christopher Waller said that "with economic activity and the labor market in good shape," he would support keeping short-term interest rates at their current levels — unless the Sept. 11 inflation report comes in worse than expected.

Other Fed officials, including Fed Chair Kevin Warsh and Fed Gov. Michael Barr, have recently suggested that a rate hike could be coming, and despite his more hike-averse stance, Waller said he wouldn't rule it out.

"While inflation remains meaningfully above the Federal Open Market Committee's (FOMC) 2 percent goal, recent data suggest we are finally seeing some signs of disinflation. If this continues in the data due over the next two weeks, I would be inclined to support holding the target for the federal funds rate at its current setting," Waller said in his speech.

But, he added, "if inflation comes in hot, I would consider a rate hike."

"If there is evidence that progress toward 2 percent inflation reversed in August, a small adjustment in our stance would help ensure that it resumes."

The market reacted quickly

Following Waller's comments, the CME Group's FedWatch tool put the chances of a short-term interest rate hike at 50.4%, down significantly from 63.2% the day before. The Federal Reserve meets Sept. 15-16 and will have Friday's jobs report and next week's inflation data to consider when making its decision.

The overall dovish tone from Waller also sparked a rally on Wall Street and sent 10-year treasury bonds down, which could mean a dip in mortgage rates in the coming days.

Inflation concerns rising — along with mortgage rates

For now, however, mortgage rates are still trending up. The 30-year rate averaged 6.71% this week, up from 6.66% the week before, according to Freddie Mac, while Mortgage News Daily pegged the average daily rate at 6.88% on Sept. 3. Both measures are significantly higher compared to a year ago.

The latest escalation in the Middle East has once again pushed oil prices higher, reviving inflation concerns and driving mortgage rates back up, according to Jiayi Xu, senior economist at Realtor.com.

"Higher inflation would simultaneously erode paychecks and real income growth while keeping mortgage rates elevated for longer. That's a squeeze on housing from both sides: what people can afford, and what they're willing to buy into," Xu said.

If inflation isn't tamed, she added, "the pain will be real."

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Read the Full Article Here!

Real Estate: A two-tier housing market.
The K-shaped economy is ‘alive and well’

The Week Us
Tristan Navera

It’s a have or have-not housing market out there, said Samantha Delouya in CNN.com. Look no further than San Francisco. Just a few years ago, the City by the Bay was a symbol of “urban decline.” Now it has the hottest housing market in the country. “Fueled by the artificial intelligence boom” that has left tech workers “flush with cash,” home prices are routinely getting bid up more than $1 million above their listing price. The median home in San Francisco now sells for $1.7 million. And the frenzy has “spilled over into the rental market as well.” Rents for one-bedrooms are up nearly 23% this year to $4,180 a month, and two-bedrooms are up nearly 26% to $6,020. And the upcoming initial public offerings from AI startups Anthropic and OpenAI are expected to only increase “the potential buying power.”

The housing market should settle the lingering debate about “whether the K-shaped economy is over,” said Anna-Louise Jackson in Fast Company. It’s “alive and well.” Entry-level homebuyers “have been priced out” and seem to have “stopped searching.” Traffic on listings of homes priced below $370,000 has fallen sharply since 2021, according to Realtor.com. But “the other end of the housing spectrum tells a very different story.” Those shopping for big, expensive houses “remain very much engaged.” Wealthy buyers are “propping up national sales figures,” said Halina Bennet in Slow Boring. Current housing data “looks decent,” but that’s because upper-end strength is masking some serious lower-end weakness. For anyone who has not “become a newly minted tech millionaire,” economic analysts say, this could be “the worst year for the housing market since 2011.”

The newly passed federal housing law could offer a potential solution, said Lily Belle Poling in The Wall Street Journal. The law makes it “easier and cheaper” to manufacture modular and prefabricated homes for assembly “on site.” Such homes “have long been stuck at the fringe of the housing market,” constituting only 3% of new construction in the U.S. But that number could soon soar. Cuts to red tape in the new law should reduce costs by $5,000 to $10,000 a home. For some homebuyers, those savings “could equal more than 10% of the original cost.” Modular homes are also moving out of the trailer parks and increasingly into the suburbs, said Julie Z. Weil in The Washington Post. Several developers are pitching them “as the way of the future,” betting that more homebuyers will be “willing to give manufactured homes” another look. Newer homes “are of a much higher quality than those of past decades,” and some of the nicest ones list for more than $600,000. But on average, a factory-built home can still be had for only $90,700.

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