Montecito Real Estate: A Look Back at the 2021 Market

WHY MONTECITO REAL ESTATE ENJOYED A RECORD-BREAKING YEAR, AND WHAT IS PREDICTED FOR 2022

Front of estate that broke sales records in 2021 Montecito Real Estate.

As we welcome the new year, it seems like everyone’s asking the same question: what’s going to happen next with the Montecito real estate market? And for good reason. 2021 was a record-breaking year for the industry, especially here in Montecito. I also broke sales records in 2021 and as a result, received some wonderful accolades. Let’s take a look back together.

The COVID-19 Effect

Prior to the COVID-19 pandemic, the real estate market was in a decent spot. Rates were low and expected to stay that way, but prices nationally, and even right here in Santa Barbara, began to inch up due to tight inventory, which has been an ongoing issue ever since.

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Then COVID came, and everything changed. First, the economy dipped briefly in early 2020. In fact, for a two-month period, the United States experienced its shortest recession in history. Shortly thereafter, the market took off. Prices were no longer just inching up; they were skyrocketing.

The upshot of all this lightning-fast market movement made 2021 a good year for homeowners looking to sell their property. Home values increased while competition became fiercer than ever. That prompted many experts to refer to the 2021 housing market as “the COVID housing market,” with all its turbulence, uncertainties, and rapidly increasing prices. As we look back at this past year’s real estate market, we’re left wondering where it goes from here. And the answer is a positive one, especially for those considering selling property. The market will be anything but slow in 2022 as flexible work options continue to shape housing decisions in new ways, especially here in Montecito.

Beautiful room wiht arched windows and a panoramic view

Our Local Housing Market in 2021

The 93108 zip code saw nearly 350 sales of single family homes, estates, and condos in 2021. Among those were many record-breaking transactions, including the remarkable Montecito estate pictured above, located on Bella Vista Drive. I had the pleasure of representing the buyer in this historical real estate deal. The new owners were immediately taken by this gated Montecito Mediterranean beauty that sits on 32-acres. Inside, the 4 bedroom, 4 1/2 bath home was built to inspire, with amazing panoramic views everywhere accentuated by high-quality finish details.

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It’s fair to say many Montecito real estate records were broken last year. In fact, I’m delighted and proud to say I broke my own record, with over $415 million in sales from 73 closed transactions: 43 sellers and 30 buyers. As a result, I ranked the #1 individual agent in the Santa Barbara MLS for sales volume and units and the #1 individual agent for Berkshire Hathaway Home Services for sales volume out of over 50,000 agents worldwide.

Home Buyers Faced Strong Competition

In 2021, buyers like those I represented for the amazing Montecito Mediterranean home featured in this blog post had to move quickly and bring extra cash to the table to get into the homes they wanted because more homes sold above asking price. In Q3 of 2020, 28.3% of homes sold over ask. In 2021, that number was up to 47%.

That’s why it’s important to work with a professional real estate agent who has knowledge of the local market, as well as proven negotiation skills. In a market like this, those are invaluable assets for both buyers and sellers.

Home Prices Increased Nearly $45,000 Year-Over-Year

Home price appreciation skyrocketed in the second and third quarters of 2021. While this came as great news for homeowners looking to sell, it made the market less navigable for buyers; another reason to hire a proven professional.

Mortgage Rates Remain Low

Mortgage rates fueled the industry, starting with a bang in 2021. In January, the average rate for a 30-year fixed-rate mortgage was the lowest it’s ever been, hitting 2.65%, according to Freddie Mac. Since then, mortgage rates have bounced up and down around the 3% line. Rates had been falling prior to the pandemic and were already relatively low by historical standards. Once the pandemic hit and the Fed began enacting policy to kick-start the economy, that downward trend only continued.

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Still, in real estate, cash is king. In fact, the national average for all cash real estate sales in 2021 hit 25%, which is up from 15% in 2020.

2022 Market Predictions

If you’re planning to list your Montecito home this year, the good news is that this hot housing market isn't over yet. At least that’s what Zillow predicts in its final 2022 forecast. According to the report, although we may not see broken records in 2022, economists expect incredibly strong price growth and sales volume to continue with 11% home value growth. And that growth will rank 2022 among the strongest years Zillow has tracked. Existing home sales are predicted to total 6.35 million, compared to an estimated 6.12 million in 2021. That would be the highest number of home sales in any year since 2006.

There’s no arguing that the 2021 Montecito real estate market was awesome, especially for sellers. And if you’re planning to make a move in Montecito, Santa Barbara, or any of the surrounding communities in 2022, I suggest you give me a call at (805) 886-9378 , or email me at Cristal@montecito-estate.com right away to take advantage of the current market. I will happily add your listing to my portfolio of amazing estates for sale and find you a new home at the same time. There’s no time like the present to jump into the real estate market!

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Client Reviews

“Cristal Clarke has conducted numerous real estate transactions for me beginning 13 years ago with the purchase of a Lemon Ranch. She has handled both large and small purchases and sales with equal dedication. As a negotiator, you can’t find anyone better. Her transactions are always conducted in the most appropriate and professional manner. Cristal has considerable knowledge of the Santa Barbara market.”

- S.N. Decker Ph.D.

“Living in Europe, we were to say the least, unaccustomed to the nuances of Real Estate acquisition in California and Cristal steered us through the process with absolute professionalism and personal attention to detail at every turn. Her in-depth knowledge of the market place combined with enthusiasm and drive was the only reason we secured the property of our dreams and will be forever grateful. If you are looking for personal discrete and private representation of the highest quality we suggest you look no further than Cristal Clarke.”

- Johan and Paula van den Berg

“Cristal is very straightforward, cheerful, helpful, professional and trustworthy….we felt very lucky to work with her.”

- John and Lacey Williams

“After considering our many choices, we are grateful it was Cristal Clarke of Sotheby’s International who represented the sale of our Montecito cottage. We are familiar with Cristal’s reputation of hard work and dedication to clients, but it was her attention to detail that made our experience so positive. She offered suggestions for staging the property, worked in harmony with potential buyers and was even able to secure back up offers. The sale of our cottage was completed much sooner than we expected, due in great part to Cristal’s professional skills and support. We highly recommend Cristal as a first choice for anyone needing representation with real estate.”

- Michael & Nancy Lee

“Our experience in working with Cristal Clarke resulted in the successful and discrete acquisition of a property which was not yet on the open market. Her knowledge of the Montecito/Santa Barbara area and vast expertise blended with her passion for real estate and architecture, provided us with the very highest level of professionalism and personalized services. Cristal exhibited a rare combination of excellent communications, attention to detail, creativity and patience.”

- Richard and Catherine Frinier

“Cristal really breaks the mold. She knows every nook and cranny of this real estate market, understands value, and follows up on everything, all the time. She was incredibly patient with our two year quest to find the perfect house. Every house hunting trip from across the country was well planned, and our time was never wasted. On top of her professionalism and expertise, she is delightful to spend time with. We are thrilled with the home we purchased, and grateful to Cristal for so wisely advising us through this process, right through to the close and beyond.”

- Laurie Siegel

“We met Cristal first in the course of renting a winter home (for three years), then buying a house using her as our agent. She was amazingly good at listening to our wants and showing us homes that fit our needs. Her mastery of the paperwork was perfect. Most importantly, there was never a situation where we doubted her straightforwardness or integrity. If we do another real estate transaction in Montecito (which I doubt, we’re happy with what we purchased), without question we’d use Cristal again.”

- Ken Saffir

“Susan and I just want to thank you for your efforts in the sale of our home. You are really quite amazing. Your competence, persistence, optimism and humor made the entire process effortless. Every problem that arose, you somehow fixed; any obstacle, you overcame. We have bought and sold many homes. It has never been such a painless and enjoyable process!”

- Michael & Susan Marquart

“A little something about “our” realtor, Cristal Clarke. My wife and I came to Santa Barbara about fifteen years ago looking for a seasonal home from which to enjoy the weather and amenities of the central coast. Being in the real estate business myself I was familiar with agents and brokers so entered the market with open eyes. We “flipped” a few houses in the early years, dealing with various agents and finally ended up in Montecito. That’s when good fortune put us together with Cristal. To say we were impressed is to put it mildly. Cristal really knows the market. She is familiar with the area, its history and trends. When we have questions about a particular property she either has the answers immediately or gets back to us by phone or email. There is no waiting or wondering with Cristal. She is an agent who is “on top of it.” Her recommendations as to price points, contractors, inspectors and title agents have proven to be exceptional, showing great insight and the highest professional standards. We consider ourselves exceedingly fortunate to say that Cristal Clarke is our realtor and would recommend her services to any serious buyer or seller.”

- Rob & Judi Kelch