The inventory has picked up here in southern Santa Barbara but sales are down. Even though the inventory has picked up slow sales are putting pressure on property prices. The Santa Barbara Real Estate market is finally slowing down after a two-year pandemic boom fueled in large part by record low borrowing costs. With mortgage rates on the rise home sales are down so what will happen to home values as we move forward? Will home prices fall?

According to some analysts, the prospect is growing more likely as the slowdown deepens, with some now adjusting their forecasts to call for price declines next year.

Such predictions mark a shift from earlier this year when there was greater expert agreement that rising mortgage rates would simply slow price appreciation. That is: Prices would keep climbing but less than they had in the last two years.

Many analysts still see the slower-growth scenario as more likely. Few well-known experts — if any — predict price declines anywhere near what happened during the Great Recession.

But the fact some major forecasters now foresee sustained price declines — something that hasn’t happened in more than a decade — underscores just how quickly the housing market is changing.

“It’s noteworthy,” said Jordan Levine, chief economist at the California Assn. of Realtors. “Prices are going to go down.” Source: LA Times, Realtor.com and www.TheSantaBarbaraRealEstateBlog.com