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 February 2020
Single Family Residence Market
Median Sales Price = $1,189,500
Lowest Sale Price = $542,000
Highest Sale Price = $8,300,000
Median Sales Price = $682,500
Lowest Sale Price = $491,000
Highest Sale Price = $2,570,000
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
March 12, 2020
Direct from the County Recorder’s Office by way of Fidelity National Title, the total number of residential sales on the South Coast of Santa Barbara County was up 10% from 115 in February 2019 to 128 in February 2020. In February 2020 there were 92 House/PUD sales, up 16% from 2019, with a median sales price of $1,189,500 and an average sales price of $1,744,859. In February 2020 there were 36 Condominium sales, down 3% from 2019, with a median sales price of $682,500 and an average sales price of $861,681. The total of the January through February sales in 2020 was 278, up 16% from 2019, with a median sales price of $1,106,250 and an average sales price of $1,476,724.
In Carpinteria there were a total of 15 sales in February 2020. The median sales price of the 9 House/PUD sales was $1,058,500 and the average sales price was $1,775,667. In February 2020 the median sales price of the 6 Condominium sales was $602,500 and the average sales price was $593,667. The lowest priced Carpinteria sale in February 2020 was a Condominium on 8th Street @ $500,000 and the highest was an Estate on Foothill Road @ $6,800,000.
There were no sales in Summerland in February 2020.
In Montecito there were a total of 18 sales in February 2020. The median sales price of the 17 House/PUD sales was $2,650,000 and the average sales price was $2,810,667. In February 2020 the median and average sales price of the 1 Condominium sale was $1,850,000. The lowest priced Montecito sale in February 2020 was a House on Olive Mill Road @ $775,000 and the highest was an Estate on Riven Rock Road @ $5,050,000.
In Santa Barbara there were a total of 72 sales in February 2020. The median sales price of the 52 House/PUD sales was $1,174,500 and the average sales price was $1,599,577. In February 2020 the median sales price of the 20 Condominium sales was $973,750 and the average sales price was $994,250. The lowest priced Santa Barbara sale in February 2020 was a Condominium on Miramonte Drive @ $491,000 and the highest was an ocean front house on Sea Ledge Lane @ $8,300,000.
There were no sales in Hope Ranch in February 2020.
In Goleta there were a total of 23 sales in February 2020. The median sales price of the 14 House/PUD sales was $886,000 and the average sales price was $970,500. In February 2020 the median sales price of the 9 Condominium sales was $470,000 and the average sales price was $635,944. The lowest priced Goleta sale in February 2020 was a Condominium on Linfield Place @ $450,000 and the highest was a PUD on Island Oak Lane @ $1,810,000.
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. The appreciation rate along the South Coast has softened and there are fewer multiple offer situations, but they still do exist depending on how the property is priced. Along the South Coast of Santa Barbara County as of March 5th there were 292 active House/PUD listings and 76 active Condominium listings available for sale. Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 130 (45%) of the 292 active House/PUD listings are located in Montecito and Hope Ranch. Compare these low totals to the inventory from 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!
Sales of bank-owned properties ranged between zero and three during each month of 2019. There were no bank-owned sales in January or February 2020. As of March 5th there are no bank owned listings for sale. There is one bank-owned House in escrow on Orena Street with a listing price of $1,199,999. Foreclosure activity along the South Coast of Santa Barbara County has diminished dramatically. In November 2019 (the latest data available from CoreLogic) .4% of home mortgages in the USA were in some stage of delinquency, which was the same as in November 2018 and lowest for the month of November in more than 20 years. To check out California’s foreclosure by county, visit this RealtyTrac link: California Foreclosure Trends by County .
As of January 2020 (the latest data available from CoreLogic), the highest recorded County median sales price in California was in San Mateo County @ $1,273,000 (up 9.8% from 2019) and the lowest recorded County median sales price was in Siskiyou County @ $193,500 (up 30.8% from 2019). The median sales price in the County of Santa Barbara was $550,000 (up 1.1% from 2019) and the median sales price in the City of Santa Barbara was $1,159,000 (down 3.3% from 2019). The lowest median sales price recorded in any California city was in Weldon in Kern County @ $35,000 (no sales in 2019) and the highest was in Atherton in San Mateo County @ $7,300,000 (up 154.8% from 2019). You could buy 209 median priced Houses in Weldon, 13.3 in the County of Santa Barbara or 6.3 in the City of Santa Barbara for the same price as 1 House in Atherton. If you care to see a 1,031 square foot House you can buy in Weldon for $35,500 check out https://www.realtor.com/realestateandhomes-detail/5570-Piute-Mountain-Rd_Weldon_CA_93283_M95522-59473?view=qv . Just for fun, check out what you can buy in Weldon for $950,000; a 25-acre ranch including a magnificent 3,650 square foot House built in 1937 https://www.realtor.com/realestateandhomes-detail/11357-Fay-Ranch-Rd_Out-of-Area_CA_93283_M14640-11156?view=qv . If you care to see a 5,885 square foot House you can buy in the Atherton area for $7,295,000 check out https://www.realtor.com/realestateandhomes-detail/1-Odell-Pl_Atherton_CA_94027_M11599-51729?view=qv .
The Federal Reserve (the Fed) raised the overnight rate four times in 2018 with the last raise to 2.5% in December 2018. In 2019 the Fed lowered the overnight interest rate numerous times, thereby reversing all of 2018’s rate increases. Last month they said the coronavirus is an example of a “wild card” and and that concern has now come to roost with the Fed making an “emergency rate cut” of .5% last week. The Fed is worried about the disruptions and slowdown caused by the spread of the coronavirus. The average of the 30-year fixed mortgage interest rate as of March 10th fell into the 2.88% range, far below their recent November 2018 highs of 4.94%, and the rate for a 15-year fixed mortgage is 2.77%. If you borrowed $510,000 in November 2018, your monthly payment would be $609 higher than it would be today; that would be a savings of $7,308 a year! To put this all in historical perspective, the lowest 30-year mortgage interest rate since 1970 was recorded in 2012 @ 3.31%, and the highest was recorded in 1981 @ 18.63%. If you have a mortgage now, you may want to look into refinancing it now.
Of the 128 sales in February 2020 there were 73 over $1,000,000 which equates to 57% of the total sales. 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. According to Forbes the national average for all cash real estate sales is 20%; on the South Coast in February 2020, 27% were cash sales. See the attachment for the total list of the 129 properties sold on the South Coast of Santa Barbara County in February 2020.
On February 25th the Conference Board reported that the Consumer Confidence Index stood at 130.7, up from 130.4 in January. In recent years the highest recent Index levels recorded were 136.4 in November 2018 and 137.9 in October 2018. “Consumer confidence improved slightly in February, following an increase in January,” said Lynn Franco, Senior Director of Economic Indicators. Historically the highest Consumer Confidence Index level was recorded in September 2000 when the Index stood at 142.5.
As for the cost of living in March 2020, Expatistan has compiled data from 262 major metropolitan areas worldwide. Expatistan’s list indicates Mountain View, CA at #4 is the most expensive area in the USA with a Price Index score of 246 and Memphis, TN at #146 is the least expensive with a score of 123. Of the top 20 most expensive areas worldwide, 3 were in California: #4 Mountain View @ 246, #7 San Francisco @ 234 and #14 Oakland @ 209. In Southern California Los Angeles came in as #25 @ 193 and San Diego as #33 @ 179. The most expensive area to live in the world is #1 Hamilton (Bermuda) @ 283 and the least expensive is #262 Madras (India) @ 53. Santa Barbara is not on the list since it is not rated as a major metropolitan area. This is a very interesting list to check out if you want to compare the cost of living in areas around the world: https://www.expatistan.com/cost-of-living/index .
As per the November 14, 2019 article by Nicolas Bedo at Realtor.com®, “California luxury markets have been struggling for the past several months, with price growth decelerating over time. However, August marked some troubling milestones for some key California markets. Los Angeles, California’s largest luxury market, saw its first price declines since 2016, as prices dropped 0.5 percent year-over-year. Million-dollar sales in Los Angeles are also down 4.5 percent since last year. Santa Clara experienced its largest decline since realtor.com started tracking luxury markets in 2010, with prices reaching $2.8 million in August, down 2.6 percent compared to a year ago. Million-dollar sales in Santa Clara are also down 23.2 percent. Marin County also saw its largest price decline since we started tracking luxury sales, with luxury prices reaching $3.1 million, down 6.5 percent year over year. San Mateo prices were flat, one of only a handful of months on record not showing price growth. Million-dollar sales were down 9.1 percent in August. Luxury home prices were also flat in Orange County for the first time since 2012. Million-dollar sales in Orange County were down 10.1 percent. The saving grace for California continues to be the center-coastal markets of Santa Barbara, San Luis Obispo, and Monterey counties. Santa Barbara was the fastest growing market in the country, with luxury entry point prices growing 20.1 percent year-over-year, reaching $2.7 million. San Luis Obispo prices reached $1.3 million this month, up 7.6 percent year-over-year. Million-dollar sales in San Luis Obispo were up 17.9 percent compared to last year. Monterey luxury prices reached $2.1 million this month, up 7 percent year-over-year. Riverside and San Diego, two of California’s southernmost counties are also showing signs of resilience in a tough market. Riverside County luxury prices reached $791,000 this month, up 3.6 percent year over year. Million-dollar sales in Riverside were up 62.8 percent in August. Likewise, San Diego prices reached $1.5 million, up 2.7 percent year over year. Sales in San Diego were up 9.2 percent.” Check out the whole article: https://www.realtor.com/research/tag/luxury-homes/
Historically the highest Year-to-Date median sales price recorded on the Santa Barbara South Coast was recorded in 2007 at $1,031,500. The February 2020 Year-to-Date median sales price was $1,105,250. The median sales price has been hovering just below or just above that historic high for most of 2017, 2018, 2019 and now into 2020. This is an indication of a leveling off in market values along the South Coast of Santa Barbara.
Based on the Santa Barbara Multiple Listing Service, as of March 5th, in the City of Santa Barbara there were 175 active House/PUD listings and 56 pending sales, which equates to a 1.8 month supply of listings for Buyers to choose from. Generally up to 3 months of inventory would be considered a Seller’s market where demand is high and inventory is scarce; lower than 2 months of inventory points to a more feverish Seller’s market. Historically a 4 to 5 month supply of available inventory would indicate a fairly well-balanced market between Buyers and Sellers. Typically a 6+ month supply is considered to be a Buyer’s market where inventory is plentiful; Buyers are slower to make decisions and want to see everything on the market. Based on Santa Barbara Multiple Listing Service data and as of March 5th, Carpinteria/Summerland had a 4.6 month supply, Montecito had a 6.6 month supply, Goleta had a 2.5 month supply and Hope Ranch had a 6 month supply. These inventory statistics indicate that Santa Barbara and Goleta are in a Seller’s market, Carpinteria/Summerland’s market is fairly balanced, while Hope Ranch and Montecito are in a Buyer’s market. With a total of 95 House/PUD pending sales and only 292 active listings on the South Coast of Santa Barbara County, there is a 3.1 month supply of House/PUD listings to choose from. With a total of 40 Condominium pending sales and only 76 active listings on the South Coast of Santa Barbara County, there is a 1.9 month supply of Condominium listings for Buyers to choose from.
The ramifications of the Federal tax cuts, planned increase in government spending, home insurance availability & rising premiums, trade tensions, genuine concerns about the coronavirus and how it has & will affect the world, the tumultuous stock market, the Federal $10,000 limit on State tax deductions and the memories of the fire damage & debris flows in Montecito are still concerns to many Buyers along the South Coast of Santa Barbara. The median sales priced Santa Barbara home would translate to a real estate tax of $15,000+/- per year. Only time will tell how all these influences will play out and how they will affect Santa Barbara neighborhood values in the long run. As always, supply and demand dynamics have and will affect the South Coast of the Santa Barbara Real Estate Market for a long time to come.
Feel free to contact me with any real estate related questions.
Stan Tabler, CRS, GRI, ABR, GREEN
801 Chapala Street
Santa Barbara, CA 93101
CalBRE Brokers License #00774377 since 1980