Whether you are a first-time home buyer or a seasoned veteran who has bought and sold properties for decades, buying or selling a home can be a complex process. While I have compiled this list of Santa Barbara Home Buying and Selling Tips as a resource for both buyers and sellers just like you, there is nothing that can replace the guidance provided by a knowledgeable and trusted member of the real estate community. As a Santa Barbara Realtor with more than three decades of experience in the Santa Barbara and surrounding markets, it would be my great pleasure to share my vast experiences with you. Perhaps one of the biggest preparations sellers can make when listing their Santa Barbara CA houses for sale is to get their home ready for buyers’ first impressions. Items such as the walkway, front porch and entryway can be crucial in a buyer’s first impression. Be sure to keep these areas free from clutter, updated and fresh. Kitchens and bathrooms are also known to “sell homes.” These are great areas to consider a few upgrades to maximize your return. As part of the Santa Barbara Real Estate Services I offer to sellers, we will walk through your home together to determine if any updates or changes need to be made to emphasize your home’s most marketable qualities. For buyers, it is important to first ask yourself why you want to buy a home: To stop paying rent? To start building equity? To raise a family? To have a place of your own? To entertain business associates? To move up to a bigger home? Next, you should determine the type of home you would like to have. Be specific and be sure to separate the “needs” from the “wants.” Once you have started this process, it will be imperative to speak with a qualified loan consultant regarding a pre-qualification. These Santa Barbara Home Buying and Selling Tips will assist you in being ready to explore communities and tour homes of interest without going on a wild goose chase.
Should you have any questions about these Santa Barbara Home Buying and Selling Tips, I encourage you to contact me. As a local real estate professional who lives, works and plays within the communities I service, it would be my great pleasure to welcome you to our area or to help you find the perfect buyers for your Santa Barbara home. Please do not hesitate to contact me today. I look forward to hearing from you soon and to earning your trust and business. Let’s get started!
Why is Santa Barbara Real Estate so expensive?
The Santa Barbara County South Coast may be the most attractive area in all of California to live due to its coastal setting, weather and no/slow growth policies which have been legally, and more importantly mentally, in place since 1972. With a total population of just over 200,000 coupled with a job base larger than the number of housing units available, the unrelenting demand for residences far outstrips the limited supply. Demand to live on the South Coast comes not only from local South Coast buyers (who account for 69.1% of the sales), but from North County buyers (1.2%), California buyers (14.7%), Western United States buyers (6.4%), Eastern United States buyers (5.8%) and Buyers from Abroad (2.8%). The South Coast’s Median Home price runs over twice the price of California’s Median Home price. Santa Barbara is a world-class destination and a highly desirable place to live; real estate values are driven by lifestyle choices, not just by economics.
What is the Median Home Selling Price?
The Median Price represents the price point at which half the homes sell for more and half sell for less. The Median Price can fluctuate from month to month depending on the price-mix of homes sold.
Current Price Trends
South Coast of Santa Barbara County
For June 2018
Single Family Residence/PUD Market
Median Sales Price = $1,025,000
Lowest Sale Price = $490,000
Highest Sale Price = $34,000,000
Condominium Market
Median Sales Price = $621,500
Lowest Sale Price = $339,000
Highest Sale Price = $1,950,000
Where can I see Santa Barbara homes for sale?
Just go to “Property Search” to listings currently available in any given price range.
Buying Your Santa Barbara Home
Step 1
Meet with me to get a general overview of the current market and to discuss what you are looking for in a home. Contact Stan by e-mail at [email protected] or on his direct line at (805) 689-2305.
Step 2
Since you will be making a serious financial commitment, your next task is to determine your budget for your investment in Santa Barbara Real Estate. If you need a mortgage, you should start the Pre-Approval process with a local lender and determine your comfort level.
Step 3
Determine the size of Santa Barbara home you will require, or can live with, by identifying the spaces you need for your family’s activities. No house will ever fully live up to your dreams, so you will probably have to make some compromises. Break the process into parts and prioritize those parts. Mentally budget for the parts your really care about!
Step 4
Select target neighborhoods that meet your needs for commuting, shopping access, quality of schools, availability, style and recreational activities. There is an array of possibilities; during this step we will tour homes in a few Santa Barbara neighborhoods to give you a overall view of the area.
Step 5
After determining which Santa Barbara neighborhoods and will fit your desires, we will concentrate your home search in the chosen areas. This may entail e-mailing the new listings to you as they come on the market or calling you with the information.
Step 6
After locating a home acceptable to you, we will prepare an offer to be presented to the Seller. This offer will contain your inspection and financing contingencies.
Step 7
Upon mutual acceptance of your negotiated offer, an escrow will be opened to handle the paperwork and title insurance needed for you to purchase the property. In California, the escrow company is a neutral third party which follows mutually agreed upon instructions from the Buyer and Seller. Your deposit check, which is usually in the amount of 3% of the purchase price, will be deposited into this escrow account.
Step 8
The length of escrow is negotiated in the offer and can be long or short, but the usual length is 30-45 days. Usually the Buyer has a 17 day inspection contingency and the Buyer has the right to inspect the property and review any disclosures the Seller can provide. If the Buyer requires a mortgage, the time frame for removing the loan contingency is usually between 17 and 21 days. These time frames are all negotiable.
Step 9
Assuming that property checks out and you have removed all your contingencies, the balance of your funds is due in escrow the last business day prior to the escrow closing. Property transfers are recorded at 8:00 AM each business day and we usually get confirmation between 10:00 and 2:00, depending on how busy the County Recorder’s office is that particular day. Upon receiving confirmation the Seller usually releases the keys to the Buyer who is then free to occupy their new property.
Santa Barbara South Coast Real Estate Update
July 11, 2018
Direct from the County Recorder’s Office, the overall number of property sales on the South Coast of Santa Barbara County was down 10% from 209 in June 2017 to 189 in June 2018, the median sales price was down 4% from $1,072,500 in June 2017 to $1,025,000 in June 2018 and the average sales price was down 31% from $1,463,577 in June 2017 to $1,010,000 in June 2018. In June 2018 there were 139 House/PUD sales with a median sales price of $1,175,000 and an average sales price of $1,681,358. In June 2018 there were 50 Condominium sales with a median sales price of $621,500 and an average sales price of $719,410.
In Carpinteria the number of sales was down 13% from 23 in June 2017 to 20 in June 2018. The median sales price was down 9% from $815,000 in June 2017 to $741,250 in June 2018 and the average sales price was down 43% from $1,590,370 in June 2017 to $901,250 in June 2018. The lowest priced Carpinteria sale in June 2018 was a Condominium on Birch Street for $360,000 and the highest sale was a House on Gobernador Canyon Road for $2,785,000.
In Summerland there were no sales in either June 2017 or June 2018.
In Montecito the number of sales was down 19% from 21 in June 2017 to 17 in June 2018. The median sales price was up 2% from $2,800,000 in June 2017 to $2,850,000 in June 2018 and the average sales price was up 27% from $3,599,690 in June 2017 to $4,582,794 in June 2018. The lowest priced Montecito sale in June 2018 was a House on Hot Springs for $1,349,500 and the highest sale was an Estate on Hidden Valley Lane for $34,000,000.
In Santa Barbara the number of sales was down 8% from 106 in June 2017 to 98 in June 2018. The median sales price was up 4% from $1,124,750 in June 2017 to $1,167,500 in June 2018 and the average sales price was down 1% from $1,244,542 in June 2017 to $1,232,100 in June 2018. The lowest priced Santa Barbara sale in May 2018 was a House on Myrtle Avenue for $490,000 and the highest sale was a House on Shoreline Drive for $3,870,000.
In Hope Ranch the number of sales was down 75% from 4 in June 2017 to 1 in June 2018. The median sales price was up 179% from $2,595,000 in June 2017 to $7,250,000 in June 2018 and the average sales price was also up 179% from $2,595,000 in June 2017 to $7,250,000 in June 2018. The lowest and highest priced Hope Ranch sale in June 2018 was an Estate on Estrella Drive for $7,250,000. Hope Ranch is a smaller market and a low number of sales in any month will affect the percentages dramatically.
In Goleta the number of sales was down 4% from 55 in June 2017 to 53 in June 2018. The median sales price was down 5% from $876,500 in June 2017 to $832,000 in June 2018 and the average sales price was down 8% from $934,782 in June 2017 to $863,208 in June 2018. The lowest priced Goleta sale in June 2018 was a Condominium on Armitos Avenue for $339,000 and the highest sale was a House on Via Los Santos for $2,250,000.
Analysis
A limited supply of available properties along the South Coast of Santa Barbara County is keeping values higher than one might expect as compared to many inland areas of California and most areas of the United States. On the South Coast of Santa Barbara County as of July 9th there were only 415 active House/PUD listings and 149 active Condominium listings available for purchase. Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 123 (30%) of the 415 active House/PUD listings are located in Montecito and Hope Ranch. Compare these low totals to the years 2007 to 2011 when the total number of available listings ranged between 734 and 1,026. Historically the highest number of available listings along the South Coast was recorded in June of 1992 when there were 1,297 listings available for sale; now that was a Buyer’s market!
In June 2018 on the South Coast of Santa Barbara there were 4 bank-owned property sales, a house on N. San Marcos Road at $585,000, a house on Gillespie Way for $645,000, a house on Alphonse Street for $665,000 and a house on Hot Springs Road for $1,349,250. As of July 9th there were no bank-owned listings in escrow and no bank-owned listing available for sale. It does appear foreclosure activity on the South Coast of Santa Barbara Country is diminishing dramatically. As of May 2018, compare Santa Barbara County’s foreclosure sale ratio of 1 in 2,395 to Kern County’s 1 in 910. Check out Realty Trac’s list: http://www.realtytrac.com/statsandtrends/foreclosuretrends/ca .
As of May 2018 (the latest data available from CoreLogic) the highest recorded median County sales price in California was a tie between San Francisco County (up 14.5% from 2017) and San Mateo County @ $1,380,000 (up 9.4% from 2017) and the lowest recorded median County sales price was in Siskiyou County @ $182,273 (up 4.2% from 2017). The median sales price in the County of Santa Barbara was $500,000 (down 5.5% from 2017) and the median sales price in the City of Santa Barbara was $1,160,000 (down 1.6% from 2017). The lowest median sales price in any California city was in Strathmore in Tulare County @ $40,000 (down 62.4% from 2017) and the highest was in Atherton (again) in San Mateo County @ $10,580,000 (up 137.6% from 2017). You could buy 264.5 median priced houses in Strathmore (maybe the whole town), 21.2 in the County of Santa Barbara or 9.1 in the City of Santa Barbara for the same price as 1 house in Atherton. If you care to see what you can buy in Strathmore for $115,000, check out https://www.realtor.com/realestateandhomes-detail/19719-Vista-Ave_Strathmore_CA_93267_M17382-53888#photo0 . If you care to see what you can buy in Atherton for $7,998,000 check out https://www.realtor.com/realestateandhomes-detail/368-Stevick-Dr_Atherton_CA_94027_M11205-98894#photo0 .
The Federal Reserve raised the short term lending rate to banks at their June 13th meeting and hinted at the possibility of two more hikes by the end of 2018. Strong retail sales numbers and unemployment rolls falling to near a 44 year low are underscoring the Fed’s optimism for the U.S. economy. Mortgage rates are still below 5% and are near historic lows, but they may not stay that way for long.
Of the 189 sales in June 2018, 97 of them were over $1,000,000 which equates to 51% of the total sales, down from 68.5% in May. The South Coast of Santa Barbara is not an inexpensive place to purchase real estate as compared to most areas of the United States, but again many people will pay more to live and invest in Santa Barbara. Of the 189 sales in May 2018, 22% (42) were cash transactions with no mortgages involved, up from 16.5% in May.
On June 26th the Conference Board reported that the Consumer Confidence Index stood at 126.5, down from 128.8 in May and up from 125.6 in April. Lynn Franco, Director of Economic Indicators at the Conference Board, stated “While expectations remain high by historical standards, the modest curtailment in optimism suggests that consumers do not foresee the economy gaining much momentum in the months ahead.”
For June 2018, data from Realtor.com indicates that only 5 (up from 4 in May and down from 13 in February, 11 in March and 6 in April) of the 20 Hottest Housing Markets in the United States were in California, ranging from San Francisco as #6 (down from #3 in May) to Santa Cruz as #20 (not on the list in May). For the first time in 6 years, no California Market made it into the top 5! These are the markets seeing the quickest sales and most buyer demand online; Santa Barbara has not placed on this list in a long time. To review the Forbes article: https://www.forbes.com/sites/ellenparis/2018/07/07/here-are-the-hottest-housing-markets-ranked-by-realtor-com/#1a1a34ac2003 . Looking at the heated Seller’s market in San Francisco, it is not unusual to see listings generating multiple offers and being bid up much higher than the asking price. Of the top 20 San Francisco overbids in June 2018, the #1 overbid was 64.9% over the list price of $849,000 and the #20 was 50.22% over the list price of $899,000. Thanks to Kim Wiley in Compass’s San Francisco office for publishing this overbid information: https://www.compass.com/c/kim.wiley/june-2018-top-20-overbids . Articles have been written stating that California’s seemingly endless grip on the top 20 hottest housing markets has ended, at least for now; https://www.realtor.com/news/trends/hottest-markets-u-s-real-estate-april-2018/ .
Historically the highest year-to-date May median sales price recorded on the Santa Barbara South Coast was in 2006 at $980,000 until May 2017 came along with a median sales price of $986,000, up to $999,500 in February 2018 and then to $1,015,000 in May 2018. The median sales price was up in June 2018 to $1,010,000, just off May’s historical high median sales price. Values on the South Coast of Santa Barbara market now have risen into uncharted territory.
The decline in the frequency of owners deciding to market their homes has played another critical role in pressurizing the many markets; owners are now staying in their homes at a median rate of 10 years, the highest level since the National Association of Realtors started tracking this statistic in 1985. Take for example the available inventory as of July 9th in Goleta where there were only 58 active House/PUD listings and 28 pending sales, which equates to only a 2.1 month supply of properties for Buyers to choose from. Generally under 3 months of inventory would be considered a Seller’s market and lower than 2 months points to a feverish Seller’s market. Historically a 4 to 5 month supply of available inventory would indicate a well-balanced market between Buyers and Sellers and typically over a 6 or 7 month supply would be considered a Buyer’s market. Based on Santa Barbara Multiple Listing Service data and as of July 9th, Carpinteria/Summerland had a 6.7 month supply, Montecito had a 5.9 month supply, Santa Barbara had a 2.8 month supply and Hope Ranch had a 7 month supply. These inventory statistics indicate that Santa Barbara and Goleta markets are still tilting in the Seller’s favor, while Carpinteria/Summerland, Hope Ranch and Montecito markets are shifting towards a Buyer’s market. With a total of 118 House/PUD pending sales and only 415 active listings on the South Coast of Santa Barbara County, there is only a combined 3.5 month supply of House/PUD listings for Buyers to choose from. With a total of 52 Condominium pending sales and only 149 active listings on the South Coast of Santa Barbara County, there is a 2.9 month supply of condominium listings for Buyers to choose from. In the short term it seems apparent that the disaster in Montecito has dampened demand in that area of the market as there was a 7.2 month supply of active listings for sale in March and now in May a 6.9 month supply of active listings. The reverse is true in Hope Ranch where there was a 13.6 month supply of active listings in early January, then a 3.6 month supply in February, a 2.8 month supply in March, a 5.8 month supply in May and now as of July 9th a 7 month supply of active listings to choose from. It is too soon to know how the Montecito disaster will affect Montecito values in the long term, but it did apply pressure on the Hope Ranch market values.
The ramifications of the Federal tax cuts and planned increase in government spending remains to be seen. I feel that the Federal $10,000 limit on State tax deductions is of concern to some Buyers. Only time will tell, but available inventory still remains near an all time low. Supply and demand dynamics have and will continue to affect the South Coast of Santa Barbara Real Estate Market for a long time.
Feel free to contact me with any real estate related questions.
Stan Tabler, CRS, GRI, ABR, GREEN
Compass California
1002 Anacapa Street
Santa Barbara, CA 93101
805.689.2305
CalBRE Brokers License #00774377 since 1980
Realtor of the Year
Santa Barbara is beautiful but very expensive. It is hard to see how the average family can afford to purchase a place there.
Nick,
I agree with our expensive assessment, but most of the coastal towns in California suffer the same housing woes. Santa Barbara is not the most expensive in the state by far, but property is not inexpensive either. It just matters how much someone wants to live in these desirable areas.
Stan
Hi Stan, can you tell me more about SB no/slow growth policy? How does it relate to building a new home versus major renovations to existing home. Looking to get an idea of the costs and building code obstacles. Also, is the construction industry primarily made of large companies or single proprietorships?
Thank you
Dominick,
Thanks for the questions. There are not many new homes being built, but we have some condominium and planned unit developments infilling the blank spaces in Goleta, all being built by larger national corporations. We do have many high quality building companies in town for building single family homes at $300++/square foot. It is not unusual to have building permits, even for small jobs, to take 6-12 months to go through the permitting process (not fun).
Stan
It is wise to consider if most places in California are within your budget. The cost of living is higher so this could take a toll on you if you are moving from out of state. It seems like a good idea to figure out what you can afford before you begin looking at homes so that you don’t fall in love with something that is out of your price range.
Joy,
I agree, finding a comfortable level for your cost of living is very important. If you move away from Coastal California, the cost of living usually goes way down. Folks just want to live in places like Santa Barbara and pay more to do so.
Stan
I had no idea that the highest number of available listings were in 1992. Was there any particular reason that it was such a buyer’s market back at that time? I speculate that the weather was particularly stable and prices had dropped.
Sam,
In the early 1990’s Southern California was in a recession, probably more so than the rest of the country since most of the local aerospace industries were closing up and laying off employees. We lost a lot of local jobs and many folks decided to leave town in search of new jobs. Hope that offers some explanation of what transpired.
Stan
I never knew that the mortgage process is very challenging for buying luxury homes so it’s good to work with a professional. My grandma is looking to buy luxury real estate for sale in my neighborhood. I’ll be sure to talk to her about working with a professional so everything is done correctly.
You have explained everything regarding real estate selling and buying very nicely. Helpful indeed. Thanks for sharing.
Very informative post Stan! I’m from San Diego but provide home inspection services and it’s always interesting to learning more about the real estate markets across Southern California.
Hi Stan- I’m considering purchasing a home in Santa Barbara. What neighborhoods offer all of the following: 1) ocean view, 2) walkable to ocean or restaurants, 3) safe and relatively tourist free? Thanks!
I agree with some of these comments, I consider best to examine the budget before looking at homes so you don’t fall in love with something that is out of said budget.
Thank you for the information, very good post.
Very useful advice. Thanks for sharing
Thanks for the tips on buying and selling real estate, I’d imagine they are applicable to most markets. I agree that one of the first things you should do is determine your budget and find out what you can afford. You wouldn’t want to get your heart set on a home that you can’t afford.