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What Does the Historic Low Home Inventory Mean for You?

January 13, 2021

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The Nation’s Historic Low Home Inventory is good for sellers like the Santa Barbara residents who own this condo.

Demand for U.S. homes is driving the number of properties for sale to new lows in the United States. Nationwide, the number of homes for sale fell below 700,000 last month. According to experts at®, that’s the lowest number of listed homes in recent history. The market has steadily eroded U.S. housing inventory since the summer and caused home prices to surge: up 13.4% year over year nationwide, and up 9.3% year-over-year right here in Santa Barbara.

READ: Housing Market Forecast: Predictions for 2021

According to Danielle Hale,®’s chief economist, the current housing shortage has been building for years, saying, “…in December the combination of the holiday inventory slowdown and the pandemic buying trend caused it to dip to its lowest level in history.” She forecasted U.S. housing supply would remain low for at least a few more months as a winter surge in Covid-19 cases discourages sellers from entering the market.

Santa Barbara Housing Market Trends

That low home inventory prediction means this is the perfect time to list your Santa Barbara home or condo, like the owners of my Luxury Lock & Go Ocean View Home listing pictured above. This amazing property is perched atop a gated knoll, showcasing sensational ocean, coastline and mountain views from nearly every room. Emanating an ambiance of warmth and refinement, with stunning details throughout, this home was designed with utmost comfort and convenience in mind. For instance, the new owners will appreciate the generously sized 3 bed, 3.5 bath open concept layout which boasts incredible scale. For example, there are 9-ft ceilings, combined with a wealth of large windows, skylights and French doors throughout. Drawing on a Mediterranean-style design, the home features gorgeous views, multiple fireplaces and patios to die for.

Due to exceptional listing like this one, top agents like me are experiencing multiple offers, with final sales as much as 3% above list price, pending in around 19 days.

READ: Buying a Santa Barbara Home During a Pandemic

Historically Low Mortgage Rates

Even for those who don’t need a mortgage because they plan to pay cash, the historically low mortgage rates have a bearing on their real estate transactions. And the 10-year Treasury has been a good indicator of where mortgage rates are headed. However, during the past several months, rates have been less tied to long-term bonds. In part, this is because the Federal Reserve has played such an outsize role in the mortgage market. In fact, since March, the Fed has been buying mortgage-backed securities in unprecedented amounts, which has pushed down mortgage rates.

The current market data has a lot to do with the 30-year fixed mortgage rate, the most popular home loan product, which sank to its lowest level on record. It fell to 2.88 percent with an average 0.8 point, according to the latest data released last week by Freddie Mac. As you probably know, points are fees paid to a lender equal to 1% of the loan amount and are in addition to the interest rate. It was 2.99% a week ago and 3.6% a year ago. Since November 2018, when it was 4.94%, mortgage rates have fallen more than two percentage points.

READ: Moving to a New Home: 6 Considerations for Families

The 30-year fixed-rate has never been this low since Freddie Mac began tracking mortgage rates in 1971. It surpassed the previous low of 2.98%, set last month. This is the eighth time since March 2020 that the 30-year fixed rate has fallen to a new low.

According to Matthew Speakman, an economist with Zillow: “Recently, downward pressure on mortgage rates has been consistent, but a combination of factors — including increased demand from borrowers and reluctance from lenders to push rates lower — had kept them afloat. But the inability for the federal government to agree to a new fiscal relief bill finally tipped rates over the edge and down to new all-time lows. Now that the threshold has been broken, more downward rate movements may be on the horizon.”

READ: Wellness Living and Wellness Real Estate: The Next Trillion-Dollar Trend?

Local Inventory

Mortgage rates hitting an all-time low have added to the demand. However, experts predict the low home inventory will subside and the resulting increase in available homes will create more options to choose from for buyers by the middle of 2021. In Montecito, for example, sellers have been enjoying exceptionally strong sales volumes since early 2020. Some experts believe that is the result of COVID-19—as urban homeowners desire to move into safe, serene and beautiful communities like ours. And how can you blame them when there are listings like my Extraordinary Modernist Masterpiece pictured here.

The liing room of a modern masterpiece that is for sale

Sitting on 5.51 acres featuring 7,188 sq. ft, this home is an excellent choice for those looking to live in true serenity. Besides 5 bedrooms and 4.4 baths the spectacular home is replete with an extensive list of indoor and outdoor amenities. Sleek and sophisticated, this breathtaking modernist masterpiece is itself a work of art. The expansive grounds include a state-of-the-art AstroTurf tennis court, an ocean view infinity pool, a serene spa, fruit orchards, multiple patios, a koi pond, and a well.

Before you go, you might want to have a look at this article from Bankrate: "A Look at the fed funds rate from the 1980s to the present"

If you’re considering taking advantage of the current low home inventory and optimum return on investment, I’m your agent. My discerning clients know they can count on me to both buy and sell their real estate assets, which makes both transactions easier. Just check out my exceptional listings in Montecito, Hope Ranch or any of Santa Barbara’s upscale communities. As I explained above, this is an excellent time to sell. Contact me at (805) 886-9378 or email me at and let me do the rest.

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Client Reviews

“It was an emotional experience selling our mother’s home in Montecito that we all loved so much but Cristal made the process easier on our whole family by guiding us through the transaction every step of the way. She knows the market so well and everything she recommended was on point including the asking price, painting, and staging the home, which looked beautiful and helped the buyer envision her new home. We sold it the first day it hit the market with an offer above asking! Cristal did an incredible job communicating with us and the buyer to ensure that the transaction would run smoothly. We highly recommend using Cristal, she was a pleasure to work with! ”

- J & A

“Cristal is a pleasure to work with! Her knowledge of the local real estate market coupled with her amazing listening skills resulted in her showing us an array of homes that were all excellent choices. Her low-pressure patient attitude made us feel extremely comfortable with the whole process. I cannot recommend her highly enough.”

- M.F.

“Cristal Clarke is #1 in her field - and you don't become #1 by luck. Cristal works harder, and longer, and with more charm and patience than any real estate agent I have ever worked with in the past; her calendar has no weekend, her days have no clocks, her only concern is selling your property as soon as possible and for the best price on the market. Am I a fan? You bet!”

- P.B.

“We have used Cristal now several times and cannot express how grateful we are for her expertise, dedication, and unwavering support throughout the entire home-buying process. Cristal is knowledgeable, patient and attentive. Her attention to detail is remarkable, and she consistently went above and beyond to provide us with all the information and resources we needed to make informed decisions. Cristal is a skillful negotiator and advocate. She can navigate complex negotiations with professionalism and grace and felt like a true partner to us in the home-buying process. Cristal has a genuine passion for real estate and a deep commitment to her clients' satisfaction. I cannot speak highly enough of Cristal and her exceptional service. She is a true expert in her field and her dedication to excellence, combined with unwavering support is the reason we choose to work with her for all our real estate buying needs.”

- T.C.

“Cristal is a top-notch realtor who sold my home before it ever went on the market. I had two competing offers that enabled me to get top dollar for my home. Not only is Cristal superb but her team is extraordinary. I cannot say enough about Cristal and her team. They are simply phenomenal, the consummate professionals, who took care of every possible detail, making the sale and transition period, smooth from our end. They are also lovely, caring people, who knew all the right professionals, to get the job done. Thank you, everyone!”

- D.R.

“I could list lots of cool adjectives to describe Cristal. All good by the way. But, that is not why I or anyone should hire Cristal. My reason for hiring her, which proved to be correct, is very simple. She got the job done. And, she does it time and time again and with zero issues. And, that is why she is one of the top agents in the country. End of subject. ”

- M.A.

“Working with Cristal was a complete pleasure. Cristal was extremely patient with us as we evaluated nearly 2 dozen homes over a span of 2 years. Her knowledge of the market is unmatched. Cristal provided us with exceptional counsel as we evaluated opportunities and negotiated pricing. The closing process was handled thoroughly and efficiently. We could not be happier with our purchase and even more happy to now call Cristal our friend.”

- D.K.

“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