Q2 June 2025 Market Report

Full Report

It’s hard to believe it’s July already! Since April 2nd, we have been monitoring the macro environment and its effect on our local real estate market. After starting the year off with double digit increases in the number of sales and median pricing, in Q2 we saw a more muted increase in the number of sales from Q2 2024, up 4%. Median Pricing remained essentially flat, up slightly by 1%.

Compared to Q1 2025, however, we experienced a ‘normal’ seasonal increase in sales (+17%), but witnessed some softening in pricing (with Median Price down 9% from Q1. It should be noted this pricing trend was not across the board, and is partly attributable to a mix shift in sales from Q1 to Q2, with Montecito comprising 22% of sales in Q1 (unusually high), to 13% of sales in Q2 (with Santa Barbara and Goleta sales taking that share in Q2). We also saw a notable uptick in inventory and months of supply in the quarter, bringing us closer to supply/demand equilibrium, the first time we’ve seen technical signs of a ‘balanced’ market since pre-covid in 2019.

We trust this report provides valuable context for evaluating the real estate market, but the nuances of each submarket, neighborhood and property are unique. And it’s precisely during these periods of higher volatility that opportunities can emerge on either side of the transaction. Alyson Spann and her team are dedicated to providing you with keen market insights and consistent exceptional service.  We are always available for your questions. 

SALES & INVENTORY

In the Second Quarter, there were 365 closings across the South County, an increase of 4% from Q2 2024 (vs. 351), and a 17% increase from Q1 (although this type of increase is a common seasonal trend from winter to spring). Over the past five years, the average change in sales from Q1 to Q2 is 19%.

Inventory and Months of Supply (MoS) took a big step towards supply/demand equilibrium during the quarter, with just over one month of supply being added. We started the year at 2.6 MoS and ended the quarter at 3.7 MoS (+40% from January). Typically four to six MoS equals a neutral, balanced market. Excluding May - July 2020, the last time we’ve experienced a balanced market was pre-covid in 2019.

PRICING

Median Pricing came in slightly above Q2 2024, up just 1% to $1.83MM (vs. $1.82MM in Q224). It should be noted that the percentage of South County sales by submarket was quite comparable to Q2 2024, unlike in Q1 when Montecito sales surged. Performance should always be more closely analyzed by submarket, however.

What This Means for You

The South Santa Barbara County market is showing signs of stabilization, offering both buyers and sellers a clearer landscape after years of uncertainty. With sales up 4% year-over-year and inventory rising, we’re approaching the balanced market conditions not seen since before the pandemic. For buyers, this means more options and slightly more negotiating power, especially with pricing leveling off and inventory up 40% since January. Sellers can still benefit from relatively strong demand—particularly in desirable submarkets—but may need to adjust pricing expectations depending on location and property type.

Whether you're considering entering the market or simply keeping tabs on trends, now is a great time to have a strategy in place. The shifts we're seeing open up opportunities for thoughtful, well-timed decisions. Our team is here to provide hyperlocal insights and guide you through every step—reach out if you'd like to discuss how these trends affect your specific goals.

👉 Want the full story?

Check out the full Santa Barbara Area Real Estate Report through June 2025 for detailed breakdowns by neighborhood, charts, trends, and expert insight.

Alyson Spann

Alyson@SpannAssociates.com

805.637.2884