Update, September 2026: The federal government shutdown mentioned below ended on November 12, 2025, after 43 days, the longest in U.S. history. The proposed increase to the capital gains exclusion on home sales has not become law. The exclusion is still $250,000 for single filers and $500,000 for married couples, although proposals to raise or eliminate it continue to be discussed in Washington. Statistics below have been verified against Santa Barbara MLS data for single-family homes (including PUDs) in Santa Barbara, Montecito, Goleta, Carpinteria and Summerland.
The last few months have been a whirlwind of activity. I've been particularly listing-heavy this year, which is great, as we need the inventory to help balance the market. There doesn't seem to be any rhyme or reason as to why a home will or won't sell. Some well-priced homes with great features are sitting with little activity, and agents I've talked to with nearby listings are seeing the same thing. Meanwhile, another listing sold pretty quickly that I would have expected to take quite a bit longer. And a super cute house on the Upper West Side took longer to sell. Most of the industry is perplexed by some of these!
Sales Are Up, and Inventory Is Nearing Balance
I only have a handful of buyers right now, and they are casually looking. They would buy if they found the right home but aren't in a hurry. I'm hearing the same from many agents, although there are still plenty of homes selling. October had 96 closed single-family sales on the South Coast vs. 94 in the same month last year. Year-to-date stats are up too: 841 single-family homes sold from January through October 2025, versus 767 over the same period in 2024, an increase of about 10%.
Interestingly, there were 317 single-family homes on the market at the end of October. At this year's pace of about 84 sales a month, that's roughly 3.8 months of inventory, edging toward a balanced market. Hopefully, with the Fed reducing interest rates, which we hope will find its way to mortgage rates, we'll see an even bigger increase in sales. As I mentioned before, if the capital gains exclusion goes up to $1M, we'll likely see a decent influx of inventory. It would be nice to have a balanced market for a few years! Perhaps that's just wishful thinking!
October 2025 Market Snapshot
- Most Expensive Home Sold: $60,000,000 (700 Picacho Ln, Montecito)
- Least Expensive Home Sold: $935,000 (811 Cieneguitas Rd, Santa Barbara)
- Median Price Home Sold: $2,020,000
- Average Price Home Sold: $4,202,838
- Average Cumulative Days on Market: 74 days
How the Government Shutdown Hit Local Real Estate
The government shutdown had an interesting impact on real estate. Cabins in the Los Padres National Forest are governed by the Forest Service and are intended for recreational use only, although several owners live there most of the time. Sales there were pretty much on hold because Forest Service staff were not working, and their voicemail said they could not answer any questions until they reopened.
With the holiday season quickly approaching, I wish you lots of health, love, and happiness throughout the rest of the year and beyond!
Cheers!
Curtis Swan II
(805) 607-9709
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