After years of stagnant inventory due to high interest rates, 2026 may be the “healing year. With mortgage rates projected to settle around 6.0%, more homeowners are willing to trade their low-rate mortgages for a move, finally injecting much-needed inventory into the California market.
Active listings are expected to rise by nearly 10% across California as seller confidence returns.
Rising incomes combined with stable prices mean that real (inflation-adjusted) home prices may actually decline slightly, giving buyers their best negotiating leverage since 2020.
For Southern Santa Barbara, this means a shift from a “frenzy” to a “flow.” Expect more days on market and fewer aggressive bidding wars, making it a strategic window for buyers who were previously priced out.
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