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 2022
Single Family Residence Market
Median Sales Price = $2,275,000
Lowest Sale Price = $724,000
Highest Sale Price = $17,250,000
Median Sales Price = $1,063,500
Lowest Sale Price = $695,000
Highest Sale Price = $3,650,000
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
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.
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.
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!
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.
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.
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.
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.
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.
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 15, 2022
Direct from the County Recorder’s Office by way of Fidelity National Title, the total number of monthly residential sales on the South Coast of Santa Barbara County was down 24% from 193 in June 2021 to 147 in June 2022. In June 2022 there were 109 House/PUD (Planned Unit Development) sales (down 16% from 2021) with a median sales price of $2,275,000 (up 22% from 2021) and an average sales price of $3,177,810 (up 19% from 2021). In June 2022 there were 38 Condominium sales, (down 41% from 2021) with a median sales price of $1,063,500 (up 26% from 2021) and an average sales price of $1,330,174 (up 27% from 2021). Year to date, there were a total of 832 residential sales in 2022 (down 28% from 2021), with a median sales price of $1,800,000 (up 18% from 2021) and an average sales price of $2,790,440 (up 11% from 2021).
In Carpinteria, there were a total of 12 residential sales in June 2022, down from 18 in May. In June 2022 the median price of the 8 House/PUD sales was $1,687,500 and the average price was $2,883,750. In June 2022 the median price of the 4 Condominium sales was $904,000 and the average price was $964,500. The lowest-priced Carpinteria sale in June 2022 was a Condominium on Ash Avenue @ $800,000 and the highest was a PUD on Arriba Street @ $5,620,000.
In Summerland, there was only one residential sale in June 2022, down from 4 in May. In June 2022 the median and average price of the 1 House/PUD sales was $10,200,000. In June 2022 there were no Condominium sales. The 1 sale in Summerland was on Greenwell Avenue @ 10,200,000.
In Montecito, there were a total of 23 residential sales in June 2022, up from 16 in May. In June 2022 the median price of the 17 House/PUD sales was $4,800,000 and the average price was $5,762,603. In June 2022 the median price of the 6 Condominium sales was $2,962,500 and the average price was $2,639,333. The lowest-priced Montecito sale in June 2022 was a Condominium on Jameson Lane @ $1,400,000 and the highest was an Estate on Buena Vista Drive @ $17,000,000.
In Santa Barbara, there were a total of 63 residential sales in June 2022, up from 49 in May. In June 2022 the median price of the 47 House/PUD sales was $2,200,000 and the average price was $2,429,830. In June 2022 the median price of the 16 Condominium sales was $962,500 and the average price was $1,165,788. The lowest-priced Santa Barbara sale in June 2022 was a Condominium on Miramonte Drive @ $695,000 and the highest was a House on Celine Drive @ $6,554,000.
In Hope Ranch, there were a total of 5 residential sales in June 2022, up from 1 in May. In June 2022 the median price of the 5 House sales was $7,800,000 and the average price was $9,050,200. There are no Condominiums in Hope Ranch. The lowest-priced Hope Ranch sale in June 2022 was a House on Las Palmas Drive @ $4,600,000 and the highest was an Estate on Via Roblada @ $17,250,000.
In Goleta, there were a total of 43 residential sales in June 2022, down from 52 in May. In June 2022 the median price of the 31 House/PUD sales was $1,600,000 and the average price was $1,796,581. In June 2022 the median price of the 12 Condominium sales was $1,007,500 and the average price was $1,016,667. The lowest-priced Goleta sale in June 2022 was a Condominium on Moreton Bay Lane @ $725,000 and the highest was a House on Cathedral Oaks Road @ $2,950,000.
The COVID-19 pandemic has not only affected our daily lives but also how everyone buys and sells real estate. Open houses and Broker Tours are once again allowed with optional mask-wearing. Many Sellers who had avoided listing their homes due to COVID-19 concerns have now moved forward and listed their properties for sale as sale prices have surged, but inventory still remains very low. Historically low mortgage interest rates and Buyers are still driving real estate values upward along the South Coast of Santa Barbara County.
All markets are hyper-localized, including the real estate market on the South Coast of Santa Barbara County with limited inventory and relatively higher values as compared to other areas of California and the United States. Focusing on the supply in any market is a good way to anticipate where the markets are heading. Along the South Coast of Santa Barbara County as of July 1st, there were 138 active House/PUD listings (up from 118 in June) and 31 active Condominium listings available (up from 16 in June). Historically there has been more inventory available in the higher price ranges than in the lower ranges; as of July 1st, 22.4% of the 138 active House/PUD listings were located in the higher-valued Montecito and Hope Ranch areas. Compare these current low totals to the inventory levels from 2007 to 2011 when the total number of active listings fluctuated between 734 and 1,026. Historically the highest number of active listings along the South Coast was recorded in June of 1992 when there were an astounding 1,297 active listings available for Buyers to choose from.
In all of 2021, there were only 2 bank-owned sales along the South Coast of Santa Barbara County. Now in 2022, there have been no bank-owned sales until June 4th; there was a sale on Cinderella Lane for $1,205,000 ($50,000 over the list price). Currently, there are no active or pending bank-owned properties on the South Coast. There have been very few distress sales due to homeowner equity rising so quickly, allowing them to “bailout” their financially distressed properties, pay off their mortgage, and avoid foreclosure. To check out California’s foreclosure list by County, check out this link: California Foreclosure Trends by County .
As of May 2022 (the latest monthly data available from CoreLogic), the highest recorded median sales price in any California county was in San Mateo County @ $1,700,000 (up 11.5% from 2021) and the lowest recorded county median sales price was in Imperial County @ $303,228 (up 6.8% from 2021). The fluctuations in the 2022 median City sales prices as compared to 2021 were highest in Olympic Valley at +279% (median sale price of $1,506,000) and the lowest in Garberville at -85.25% (median sale price of $100,0000.) The median sales price in Santa Barbara County was $775,000 (up 5% from 2021) while the median sales price in the City of Santa Barbara was $1,900,000 (down 1.9% from 2021). The lowest residential median sales price in any California city was recorded in Trona in San Bernardino County @ $93,000 (up 91.8% from 2021) and the highest was in Atherton in San Mateo County @ $7,725,500 (down 7.8% from 2021). You could buy 83 median-priced Houses in Trona, 10 in Santa Barbara County, or 4 in the City of Santa Barbara for the same price as 1 House in Atherton. If you care to see a House you can buy in Trona for only $90,000, check out https://www.realtor.com/realestateandhomes-detail/12108-Lakeview-Dr_Trona_CA_93562_M25623-74951?ex=2944587646 . If you care to see a House you can buy in Atherton for $7,000,000, check out https://www.realtor.com/realestateandhomes-detail/83-Wisteria-Way_Atherton_CA_94027_M19524-34741?ex=2943625444 .
The Federal Reserve (the Fed) had maintained a near-zero rate since early 2020 due to the negative effects on the world economy due to COVID-19 and supply chain issues. The early May half-a-point hike was the biggest rate increase in 22 years followed by an even larger three-quarter hike in June. The Fed is making a high-risk bet that it can hopefully slow the economy down enough to rein in inflation without weakening it so much as to trigger a recession. Other than high inflation, the economy looks good and healthy for now, with a robust job market and very low unemployment. Many economists are now warning that the Fed’s steady rate increases will probably cause a downturn, if not a recession. On June 20th, Fed Chairman Jerome Powell testified before the Senate Banking Committee and in response to a question about a recession said “It’s not our intended outcome, but it is certainly a possibility.” Mortgage interest rates have increased close to 2% since the beginning of 2022 and many economists predict they will continue climbing. As of July 8th, you could lock in a $640,000 30-year fixed-rate loan at 5.75% with a 1% closing fee. Strange as it may seem, if you borrow more than $647,200, the interest rate will actually go down to 5%. Historically the lowest 30-year mortgage interest rate since 1970 was recorded in February 2021 at 2.65%, which was matched again in July 2021. The highest historical mortgage rate was recorded in 1981 @ 18.63%. As a comparison, a payment for a $640,000 mortgage in 1981 would have been $9,975/month, the payment in February 2021 would have been $2,616/month, and as of July 8th, the payment would be $3,735/month. According to the Mortgage Bankers Association, mortgage applications have decreased to their lowest levels since December 2018. Increased mortgage rates have dissuaded some potential buyers, and the slip in demand is expected to continue to slow buyer enthusiasm.
Of the 147 sales in June 2022, 125 were over $1,000,000 which equates to 85% of the total sales, up from 82% in May. The South Coast of Santa Barbara is not an inexpensive place to purchase real estate compared to most areas of the United States, but again many people will pay more to live and invest in Santa Barbara. According to PropertyShark’s 2021 report, California has 89 of the 127 most expensive median-priced sales’ ZIP codes in the country with New York being the next highest with 17 ZIPs. Montecito’s 93108 ZIP came in at #7 nationally. https://www.propertyshark.com/Real-Estate-Reports/most-expensive-zip-codes-in-the-us
The National Association of Home Builders Housing Market Index is a good indicator of where home builders see the national real estate home market going. In June their confidence fell 2 points to 67. Any reading above 50 on this index still signals expansion and while an index of 67 is not necessarily bad, the drops since December 2021 have been significant. We shall see where this index goes in the future.
According to USA Today, the national average for all-cash real estate sales was 33% in the first quarter of 2022, 25% in 2021, and 15% in 2020. On the South Coast in June 2022, 35% of the sales were cash sales, up from 26% in May. Review the attached list of the 147 properties sold on the South Coast of Santa Barbara County in June 2022 and/or contact me for information on specific sales.
On June 1st UCLA presented its Economic Outlook which essentially suggests that the economy peaked a few months ago and is now slowing down, but it is not in a recession. The Outlook predicts a recession is at least a year away, but maybe as much as 3 years away. To watch the entire Economic Outlook click HERE.
On June 28th the Conference Board reported that the Consumer Confidence Index was 98.7, down from 103.2 in May. In recent years the highest Index level recorded was 137.9 in October 2018 and it was more recently as high as 132.6 in February 2020, at the very start of the COVID-19 pandemic. Historically the highest Consumer Confidence Index level was recorded in September 2000 when the Index stood at 142.5. “Consumer confidence fell for a second consecutive month in June,” said Lynn Franco, Senior Director of Economic Indicators at the Conference Board. “While the Present Situation Index was relatively unchanged, the Expectations Index continued its recent downward trajectory—falling to its lowest point in nearly a decade. Consumers’ grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices. Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as the growing risk of recession by yearend.” To review the full report: https://conference-board.org/data/consumerconfidence.cfm .
As for the worldwide cost of living as of July 2nd, Expatistan compiled an index of 270 major metropolitan areas. The cost of gasoline was checked on July 2nd. Expatistan’s list indicates #3 San Francisco with a 246 Price Index score is the most expensive area in California (a gallon of regular gas costs $6.25) and the least expensive is #99 Modesto with a Price Index score of 140 ($5.69/gallon). In the USA, #2 New York City @ 257 ($4.83/gallon) was the most expensive and the least expensive was #145 Cedar Rapids, Iowa @ 117 ($4.60/gallon). Of the top 25 most expensive areas worldwide, 5 are in California including San Francisco at #3, #11 Los Angeles @ 221 ($5.99/gallon), #18 San Diego @ 202 ($5.87/gallon), and #21 Sacramento @ 195 ($5.89/gallon). The most expensive area to live in the world is #1 Hamilton (Bermuda) @ 280 ($8.66/gallon) and the least expensive is #270 Visakhapatnam (India) @ 44 ($6.88/gallon). Santa Barbara is not on the list as Expatistan does not rate it as a major metropolitan area, but local gas prices of $5.99/gallon are higher than larger California urban areas. In June the highest gas price in California was $9.60/gallon in Mendocino. Expatistan’s Cost of Living index is interesting to check out to compare the cost of living in cities around the world: https://www.expatistan.com/cost-of-living/index
“Realtor.com®’s June housing data release shows a continued improvement in housing inventory for the second month, with the count of home listings actively for sale growing compared to last year by the largest margin in the data’s history. This turnaround in inventory is being driven by both sellers entering the market and by moderating demand. Newly listed homes entered the market at a higher rate (+4.5% year-over-year) than in the recent past, though slightly slower compared to May, when newly listed homes increased by 6.3% year-over-year. Moderating demand has taken a larger toll this month, with pending listings declining sizably (-16.3% year-over-year) compared to last year.”
Historically the highest Year-to-Date median sales price recorded on the Santa Barbara South Coast was recorded back in 2007 at $1,031,500. In June 2022 the median sales price was $1,800,000, equal to $1,800,000 in both May and April and up 21% from 2021. The median sales price had been hovering near 2007’s historic high for most of 2017, 2018, and 2019, started an upward creep in 2020, and then accelerated in 2021. Now in 2022 new record high median sales prices are being set. In June 2022 the average South Coast sales price was $2,790,440.
Based on the Santa Barbara Multiple Listing Service data, as of July 1st in the City of Santa Barbara, there were 68 active House/PUD listings (up from 43 in June) and 22 pending sales (down from 28 in June), which equates to a low 3.1 month supply (up from 1.5 in June) of listings for Buyers to choose from. Generally a “one-month supply” would indicate the listings would all be sold within one month. A two-to-four-month supply of inventory would be considered a basic Seller’s market where demand is high and inventory is scarce, a one-to-two-month supply of inventory indicates a heated Seller’s market and a one-month or less supply indicates a feverish Seller’s market. Historically a four-to-six-month supply of available inventory would indicate a fairly well-balanced, normal market between Buyers and Sellers. Typically more than a six-month supply is considered to be a Buyer’s market where inventory is plentiful; Buyers are slower to make decisions and want to compare everything on the market. Based on Santa Barbara Multiple Listing Service data and as of July 1st, Carpinteria/Summerland had a 3.1 month supply (up from 2.5 in June), Montecito had a 3.8 month supply (up from 2.5 in June), Goleta had a 1 month supply (up from .87 in June) and Hope Ranch had a 4 month supply (up from 1.8 in June). These inventory statistics indicate that Carpinteria/Summerland, Santa Barbara, and Montecito are now in a basic Seller’s market. Hope Ranch is now in a fairly well-balanced market. Goleta remains in a feverish Seller’s Market. With a combined total of 54 House/PUD pending sales (down from 76 in June) and 138 active listings (up from118 in June) on the South Coast of Santa Barbara County, there is only a 2.6 month supply (up from 1.6 in June) of House/PUD listings from which Buyers can choose. With a combined total of 18 Condominium pending sales (down from 30 in June) and only 31 active listings (up from 19 in June) on the South Coast of Santa Barbara County, there is only a 1.7 month supply (up from .53 in June) of Condominium listings from which Buyers can choose. All areas now have more House/PUD listings to choose from than there were in June, but the South Coast market still remains mostly in a basic Seller’s Market, a step down from a more feverish Seller’s Market in June. The market has calmed and instead of seeing 7+ offers on a listing, we are only seeing 1-3. Buyers now have more inventory to choose from than they have had in previous months.
The ramifications of the concerns about COVID-19 and how it has and will continue to affect our world, the war in Ukraine, inflation, the cost of gasoline, scarcity of insurance companies in California, rising mortgage rates, and rising insurance premiums are all concerns to many Buyers, and Sellers. Now that Proposition 19 has taken full effect, 55+ year-old homeowners can transfer their existing real estate tax base to a new home anywhere in California. Mortgage interest rates have risen lately but are still near historical lows. Extremely low inventory and the COVID-19 migratory trends toward smaller cities all have led to a surge in Santa Barbara property values. With a number of qualified Buyers and lower inventory, do not expect to see values going down anytime soon. Supply and demand dynamics have and will continue to affect the South Coast of the Santa Barbara Real Estate Market now and for a long time to come.
Feel free to contact me with any questions.
Stan Tabler, CRS, GRI, ABR, GREEN
801 Chapala Street
Santa Barbara, CA 93101
CalBRE Brokers License #00774377 since 1980