Santa Teresa Market Update - September 2026

The Santa Teresa real estate market has changed significantly from the highly competitive, seller-favorable conditions seen in previous years. Through 2025 and into 2026, buyers have generally had more properties to choose from and more time to evaluate their options. With greater choice, buyers are taking a more thoughtful approach to their search, comparing properties based on location, price, construction quality, views, infrastructure, rental potential and long-term value rather than feeling pressure to act quickly simply because inventory is limited.

As buyers take more time to compare their options, we are seeing a clearer difference between properties that generate interest and those that remain on the market. Properties with a strong combination of location, quality, and pricing are attracting attention, while properties that are priced too far above comparable options are taking longer to generate serious interest.

WHAT WE ARE SEEING IN THE MARKET

Buyers Have More Choice

In contrast with the tighter inventory of previous years, buyers currently have more properties to choose from. For example, our office currently has 200 active listings, compared with approximately 50 active listings that we maintained fairly consistently throughout 2021, 2022 and 2023. 

This has changed the way buyers are making decisions. Rather than feeling pressure to purchase the first suitable property they find, buyers can take more time to compare different locations, construction quality, views, amenities, rental potential and pricing.

This greater selection has made buyers more deliberate—and more sensitive to differences in value.

Pricing Has Become Increasingly Important

Buyers are looking more carefully at what they are actually getting for the price and comparing properties against competing inventory. Properties that are priced appropriately for their location and quality attract attention quickly, while properties that are significantly above comparable options remain on the market for considerably longer. This makes accurate pricing particularly important in a market like Santa Teresa, where properties can differ substantially even within the same general area.

We are also seeing a significant number of price reductions, indicating that some sellers have adjusted their expectations to better reflect current market conditions and increasingly selective buyers.

Location Continues to Be a Major Differentiator

Santa Teresa is not one uniform real estate market. Prices can vary considerably depending on proximity to the beach, ocean views, road access, infrastructure, water availability, construction quality and development potential. As a result, broad market averages can be misleading. A change in the average price across the entire Santa Teresa area does not necessarily tell us what is happening with a particular type of property or in a particular neighborhood. The more relevant question is how a property compares with similar properties in a similar location.

The most desirable locations and properties with genuinely scarce characteristics—such as 180-degree ocean views, convenient beach access, quality construction or reliable year-round water connections—continue to command attention when they are priced appropriately.

Buyers Are Doing Deeper Due Diligence

Today's buyers are generally doing more due diligence before committing to a purchase. Beyond the property itself, they are looking carefully at zoning allowances, permits, water and electricity, road access, construction quality, operating costs, rental potential or performance, and the long-term potential of the property.

For sellers, this means that having your home ready for viewings alone is not enough. The entire listing package needs to be complete, readily available, and make sense to an informed buyer.

WHAT THIS MEANS FOR BUYERS

The current market offers buyers something that was more difficult to find during the most competitive periods: time and choice. Buyers can compare properties, negotiate terms, conduct thorough due diligence and be more selective about where they invest their money. However, greater choice does not necessarily mean buyers should expect large discounts across the board. The strongest opportunities still maintain their value and attract attention quickly, particularly when they combine a desirable location, quality construction and realistic pricing. Certain features of  Santa Teresa real estate are inherently scarce—such as quick beach access or unobstructed ocean views—and waiting indefinitely for a lower price may mean losing the property altogether.

For buyers, the focus should therefore be less on trying to predict whether the entire market will rise or fall and more on determining whether a particular property represents good value at its current price. Buyers should be prepared to act when the right property appears. Waiting for an across-the-board price decline is not necessarily the best strategy if the property itself is scarce or unusually well positioned. The most important question is not simply, “Is the market going up or down?”. It is: “Is this particular property fairly priced relative to its location, quality and the alternatives available today?”

WHAT THIS MEANS FOR SELLERS

For sellers, the current market requires a realistic understanding of how buyers are comparing properties. Having more inventory means buyers have choice. If a property is priced significantly above comparable options, buyers can often move on to something else rather than making an offer. This makes initial pricing and positioning particularly important.

Before putting a property on the market, sellers should consider:

• What comparable properties are currently available?

• What similar properties have actually sold—not just what sellers are asking?

• How does the property's location compare with competing inventory?

• Does the property have characteristics that genuinely justify a premium?

• Is the property presented and maintained to the standard buyers expect at its price point?

• Are there any infrastructure, legal or access issues that could affect buyer interest?

A property does not necessarily need to be the cheapest option to sell. It needs to offer a compelling reason for a buyer to choose it over the alternatives. 

In today's market, overpricing can be particularly costly. A property that enters the market significantly above its competitive range may spend months without serious offers and eventually require a price adjustment. By that point, the property may have lost some of the attention it would have received when it was first introduced.

LOOKING AHEAD

The Santa Teresa market appears to be moving into a more balanced phase. Buyers have more choice and negotiating flexibility than they had during the strongest seller-driven periods, while sellers are seeing that well-positioned properties can still generate meaningful interest.

We expect the market to remain highly property-specific. Rather than every property moving in the same direction, differences in location, quality, access, views and pricing are likely to have an increasingly important influence on which properties attract buyers.

For buyers, there are opportunities—being selective, taking the time necessary for careful comparison and conducting thorough due diligence remain important.

For sellers, understanding the competitive market and pricing a property appropriately from the outset can make a significant difference.

Ultimately, the current Santa Teresa market is less about trying to predict the exact direction of prices and more about understanding relative value. Buyers who understand what represents good value can take advantage of the greater selection available today, while sellers who understand how buyers are evaluating their property can position themselves more effectively in a competitive market.