Santa Barbara Real Estate Market Report | Q3 2025 Overview + September Market Recap

As we close out the third quarter of 2025, the Santa Barbara real estate market continues to show resilience amid shifting economic signals, rising inventory, and increased buyer selectivity. After a quieter summer, September brought a noticeable uptick in activity, driven by the Fed’s long-awaited rate cut and bullish equity markets. Still, a more discerning buyer pool is leading to shifts in pricing and seller strategy, adding new complexity to an already nuanced market.

Q3 OVERVIEW: STEADY SALES VOLUME, MIXED PRICING TRENDS

Compared to Q3 2024, the overall residential market saw modest year-over-year changes. Total sales volume was up 12%, with 346 total transactions closed in Q3 2025.

While both the average and median price have increased slightly relative to Q3 2024, segmented pricing tells a more complex story:

Single-family homes
Average price: $3,415,753 (▼2%)
Median price: $2,300,000 (▲5%)

Condos & townhomes
Average price: $1,314,546 (▼6%)
Median price: $1,180,000 (▼9%)

While prices are down slightly from last year’s third-quarter highs, they remain historically strong.

SEPTEMBER TELLS A MORE DYNAMIC STORY

Comparing September 2025 to September 2024, however, reveals a dramatic change:

• Single-family average price fell 14%
• Single-family median price dropped 6%
• Condo average price declined 4%
• Condo median price increased 1%

This sharp correction in September reflects the recent influx of new and repositioned listings combined with more cautious buyer sentiment, particularly at the upper end of the market where listings have grown. Buyer activity has shifted toward well-priced, move-in-ready properties, while homes in need of updates or priced aggressively are sitting longer and seeing price reductions.

INVENTORY & BUYER DYNAMICS

• Months of Inventory Supply: Rebounded to 3.91 in September, up from a low of 2.93 in August, marking the highest level year to date
• Cash Buyers: Represented 37% of all transactions, underscoring the role of equity-driven purchases in today’s market

This uptick in inventory likely correlates with the Fed’s September rate cut, which encouraged more sellers to re-enter the market.

FINAL TAKEAWAYS

As we enter Q4, Santa Barbara remains fundamentally sound but more nuanced. Luxury sales are recalibrating, while core neighborhoods are showing stability. The market is rebalancing, offering both challenges and opportunities for strategic buyers and sellers.

At Knight Real Estate Group, we bring over 20 years of experience navigating both bullish and transitional markets. We know how to position properties for maximum impact and help buyers uncover value in shifting conditions. Whether you’re buying, selling, or planning ahead, we’re here to guide you with data, perspective, and results.

Disclaimer: This report is based on available data and market trends as of 9/1/25. Actual market conditions may vary, and individuals are encouraged to consult with real estate professionals for personalized advice.

Santa Barbara Real Estate Market Report | July 2025

As we move into the second half of 2025, the Santa Barbara real estate market is showing signs of rebalancing. Buyer activity has slowed compared to the spring surge, creating new opportunities in an environment that had previously been dominated by seller leverage.

Rising inventory and longer days on market are giving buyers more negotiating power, while sellers are adjusting expectations. At the same time, softening mortgage rates and the return of routine after summer break may bring renewed activity in the fall.

While buyer behavior has become more cautious, the market continues to reward well-positioned properties. In fact, 21% of all July sales closed above the asking price—evidence that demand remains strong for desirable homes in sought-after locations.

JULY 2025 MARKET OVERVIEW

Total Sales Volume
120 closed transactions (up 30% year-over-year)

Single-Family Homes
Average Price: $3,976,096 (up 6%)
Median Price: $2,408,750 (up 20%)

Condos & Townhomes
Average Price: $1,085,815 (down 17%)
Median Price: $890,850 (down 7%)

Market Dynamics
Inventory: 3.87 months of supply — the highest level since late 2020
Cash Buyers: 34% of all transactions

Despite cooling demand, home values remain elevated, and longer-term homeowners continue to see meaningful equity gains.

WHAT BUYERS AND SELLERS NEED TO KNOW

Today’s market rewards precision. Buyers are focused on value and move-in readiness. Homes that are updated, staged, and priced appropriately are still commanding attention—and in some cases, multiple offers.

For sellers, strategic preparation and pricing are more important than ever. Overpriced listings or those needing significant updates are sitting longer and may require price adjustments.

LOOKING AHEAD

As summer vacations wrap up and routines resume, we typically see a seasonal uptick in buyer activity. The post–Labor Day period often brings a renewed sense of focus, with buyers and sellers re-engaging in earnest before the end of the year.

Sellers considering listing this fall should begin preparing now. For buyers, increased inventory and more favorable mortgage rates may present timely opportunities.

REAL ESTATE STRATEGY YOU CAN TRUST

At Knight Real Estate Group, we pair data-driven insights with over 20 years of local expertise to help our clients succeed—through every market cycle. If you’re considering a move, curious about the value of your home, or simply want to better understand today’s landscape, we’re here to help.

Disclaimer: This report is based on available data and market trends as of 7/1/25. Actual market conditions may vary, and individuals are encouraged to consult with real estate professionals for personalized advice.

Santa Barbara Real Estate Market Report | Q2 2025 Overview + June Market Recap

A Market in Transition

Total residential sales reached $1.21 billion, representing a 3.4% increase in transaction count over Q2 2024. The luxury market showed notable strength—June posted the highest number of $10M+ sales in over a year. However, mid-market activity has become more price-sensitive, and buyers across all segments are approaching with increased scrutiny. Homes that are not priced for current conditions are seeing longer time on market, more cancellations, and price reductions.

MARKET HIGHLIGHTS – Q2 2025

Single-Family Homes

241 sales | Average Price: $3,660,917 (-6.2%) | Median Price: $2,425,000 (-6.9%)

Condos/Townhomes

103 sales | Average Price: $1,434,370 (+5.9%) | Median Price: $1,027,000 (+2.2%)
Cash Buyers: Represented 35% of all Q2 sales; 40% in June
Inventory: 3.72 months of supply (highest level since late 2020

JUNE 2025 SALES ACTIVITY

Single-Family Homes

• 84 sales | Average Price: $3,263,066 | Median Price: $2,138,830

Condos & Townhomes

• 29 sales | Average Price: $1,429,585 | Median Price: $999,000

What’s Driving the Shift?
In April, the announcement of steep new tariffs contributed to heightened market volatility. Combined with persistent inflation, stock market swings, and rising insurance premiums, consumer confidence has weakened. Meanwhile, a growing supply of homes, paired with mortgage rates that remain elevated, has given buyers more room to negotiate and reduced the urgency that characterized the post-pandemic market.

Buyer Behavior in Today’s Market
Buyers are increasingly value-conscious. Move-in-ready homes, especially those that are staged and well presented, are still commanding attention and, in some cases, multiple offers. But properties requiring updates or priced above current expectations are lingering. Activity in the $3M-5M+ segment remains strong, particularly for well-positioned listings, but buyers are acting with greater discretion.

Opportunities & Takeaways
Despite mixed headlines, the Santa Barbara market remains fundamentally sound. Demand continues to be supported by limited inventory, desirable lifestyle factors, and a significant percentage of cash buyers. Still, selectivity is rising across all price points, and sellers should adjust expectations accordingly.

• Sellers: Prioritize strategic pricing, top-tier presentation, and flexibility.
• Buyers: Increased inventory and longer days on market may offer more leverage.
• Investors: Watch for mid-market listings where lifestyle value aligns with smart pricing.

At Knight Real Estate Group, we provide data-driven guidance tailored to every market condition. With over 20 years of experience navigating both strong and shifting markets, we know how to adapt with insight and strategy. While many agents have only worked in a prolonged seller’s market, we’ve helped our clients succeed through every turn of the cycle—with professionalism, clarity, and results.

If you’re considering a move, curious about your home’s current value, or simply want to better understand today’s landscape, we’re here to help.

Disclaimer: This report is based on available data and market trends as of 6/1/25. Actual market conditions may vary, and individuals are encouraged to consult with real estate professionals for personalized advice.

Santa Barbara Real Estate Market Report | April 2025

A Market of Contrasts: Headwinds, Tailwinds, and Changing Buyer Behavior

Santa Barbara’s real estate market in April reflected a complex set of dynamics. Sales activity remained strong overall, with total transaction volume up 14% year-over-year. However, that momentum was uneven across price points. While the entry-level and mid-range segments remain active and, in some cases, competitive, the $4M+ luxury market has slowed, with buyers exhibiting greater caution in light of economic and policy uncertainty.

Rising interest rates, declining consumer confidence, an increasingly challenging insurance environment, and broader geopolitical tensions (including tariffs and inflationary pressures) are shaping today’s market. These factors have led many buyers—particularly at the high end—to proceed with more discretion.

MARKET HIGHLIGHTS – APRIL 2025 vs APRIL 2024
Total Sales: 127 transactions (▲14%)

Single-Family Homes

• 94 sold
• Average Price: $3,207,922 (▼13%)
• Median Price: $2,175,000 (▼4%)

Condos & Townhomes

• 33 sold
• Average Price: $1,454,360 (▲29%)
• Median Price: $1,049,000 (▼3%)

Cash Buyers: Represented 35% of April transactions
Inventory: Rose to 3.38 months of supply—the highest level since late 2020

BUYER PRIORITIES ARE SHIFTING
Today’s buyers are clearly prioritizing move-in ready, “turn-key” homes and are often willing to pay a premium for properties that deliver on style, quality, and condition. In contrast, listings that require updates or renovations are facing slower absorption rates and must be priced accordingly.

Buyers are less willing to stretch if they feel a home is overpriced relative to its condition—leading to a rise in price reductions across the board.

LOOKING AHEAD
As we head deeper into Q2, the market continues to adjust. The underlying demand for Santa Barbara real estate remains intact, but expectations are evolving. Sellers need to be more strategic than ever—both in pricing and presentation—to meet buyers where they are.

At Knight Real Estate Group, we continue to advise our clients with thoughtful, data-driven strategies tailored to current market conditions. If you’re thinking about buying or selling—or simply want to understand where the market is headed—let’s connect.

Disclaimer: This report is based on available data and market trends as of 4/1/25. Actual market conditions may vary, and individuals are encouraged to consult with real estate professionals for personalized advice.