July 2026 Market Update

Happy July! I’ve been tinkering with AI as I have heard it works well for real estate information and our Multiple Listing Service just allowed us to connect with two of the AI companies, so I asked it how Santa Barbara’s current market differs from the rest of the markets. I wasn’t surprised to read it and agree with it. Our market has always had a delay when the market shifted in other areas – generally about 6 months. It appears that we are a year behind now, so we will likely start seeing a shift sometime in the near future. The good news is our recovery tends to be faster than most markets. Here is what Claude AI said:
 
“Nationally, the market has been shifting toward buyers over the past year — the national existing-home market had 4.6 months of inventory as of June 2026, and home sellers have been outnumbering buyers by a record gap in many places, giving buyers unusual negotiating leverage. Housing market activity overall has remained subdued, with weakening demand and high costs sidelining many would-be buyers in 2026. National Association of REALTORS + 2
 
Santa Barbara looks quite different from that national picture:

Why the divergence: This fits a broader pattern researchers are seeing — the U.S. housing market in mid-2026 remains split by an affordability gap and wealth gap, with high-cost coastal markets behaving very differently from the rest of the country. Coastal markets propelled by concentrated wealth (the report specifically points to tech/AI-driven wealth on the West Coast) are seeing buyers who are well-insulated from mortgage rate volatility, thanks to accumulated home equity and wealth gains, continuing to compete hard for limited inventory. Santa Barbara — small, supply-constrained, high-net-worth-buyer-heavy — looks like a textbook example of that segment. Cotality

Contrast with more typical mid-tier markets: A market like St. Louis, for comparison, has been moving the opposite direction — St. Louis months of supply moved from tighter levels around 2.0 months early in the year toward 3.0-3.2 months by mid-year, following the national trend of inventory climbing toward 4.5 months, and sellers there can no longer rely on the automatic bidding-war frenzy of previous years. Housesoldeasy

Bottom line: While much of the country is drifting toward buyer-friendlier conditions (more supply, longer days on market, more concessions), Santa Barbara is bucking that trend — inventory is shrinking, prices are holding near asking, and homes are moving faster than the national average. That’s consistent with its position as a high-demand, supply-constrained coastal market that’s more insulated from the affordability pressures weighing on the broader U.S. market.”

While this last paragraph may have sellers believing their homes can sell for more than the neighbor, the market may stable but not increasing. We are seeing some homes with bidding wars and many without. The key to making the most on your home is to price it so that buyers have that perception of value that makes them want to write an offer!

As a reminder, I am the chairperson for the Santa Barbara Humane Gala again this year. It will be a fun, western themed Harvest Moon event with a great live band (country, blues and rock) and line dance lessons. The dinner is sure to be delicious – I taste tested it and many of you know I am a foodie! Individual tickets are now available through this link: https://sbhumane.org/gala2026/  I hope to see you there!

Cheers!
Ruth Ann and Angie