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 December 2021
Single Family Residence Market
Median Sales Price = $1,750,000
Lowest Sale Price = $719,000
Highest Sale Price = $26,500,000
Median Sales Price = $845,000
Lowest Sale Price = $485,000
Highest Sale Price = $2,200,000
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
January 10, 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 230 in December 2020 to 138 in December 2021. In December 2021 there were 91 House/PUD (Planned Unit Development) sales, down 36% from 2020, with a median sales price of $1,750,000 (up 12% from 2020) and an average sales price of $2,760,223 (up 6% from 2020). In December 2021 there were 47 Condominium sales, (down 47% from 2020) with a median sales price of $845,000 (up 7% from 2020) and an average sales price of $942,702 (up 3% from 2020). Year to date, there were a total of 2,216 residential sales in 2021 (up 5% from 2020), with a median sales price of $1,492,500 (up 24% from 2020) and average sales price of $2,415,863 (up 24% from 2020).
In Carpinteria there were a total of 13 sales in December 2021, down from 19 in November. In December 2021 the median price of the 4 House/PUD sales was $1,322,500 and the average price was $1,485,000. In December 2021 the median price of the 9 Condominium sales was $660,000 and the average price was $656,556. The lowest priced Carpinteria sale in December 2021 was a Condominium on Sawyer Avenue @ $500,000 and the highest was a House on Venice Lane @ $2,400,000.
In Summerland there were no sales in December 2021, down from 1 in November.
In Montecito there were a total of 18 sales in December 2021, down from 24 in November. In December 2021 the median price of the 16 House/PUD sales was $4,132,500 and the average price was $7,050,938. In December 2021 the median and average price of the 2 Condominium sales was $1,775,000. The lowest priced Montecito sale in December 2021 was a Condominium on Fairway Road @ $1,750,000 and the highest was a House/PUD on Bonnymede Drive @ $26,500,000.
In Santa Barbara there were a total of 61 sales in December 2021, up from 54 in November. In December 2021 the median price of the 43 House/PUD sales was $1,625,700 and the average price was $1,835,774. In December 2021 the median price of the 18 Condominium sales was $985,000 and the average price was $1,138,472. The lowest priced Santa Barbara sale in December 2021 was a Condominium on Miramonte Drive @ $607,000 and the highest was an Estate on El Cielito Road @ $7,000,000.
In Hope Ranch there were a total of 2 sales in December 2021, down from 6 in November. In December 2021 the median and average price of the 2 House/PUD sales was $4,100,000. There are no Condominiums in Hope Ranch. The lowest priced Hope Ranch sale in December 2021 was a House on Via Laguna @ $3,100,000 and the highest was an Estate on Via Huerto @ $5,100,000.
In Goleta there were a total of 44 sales in December 2021, down from 51 in November. In December 2021 the median price of the 26 House/PUD sales was $1,587,500 and the average price was $1,741,808. In December 2021 the median price of the 18 Condominium sales was $820,000 and the average price was $797,528. The lowest priced Goleta sale in December 2021 was a Condominium on Armitos Avenue @ $485,000 and the highest was an Estate on Via Del Rey @ $4,275,000.
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 were once again allowed with mask-wearing required. 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. And now the Omicron variant is causing many to be very cautious. Historically low mortgage interest rates and the glut of Buyers are driving real estate values upward along the South Coast of Santa Barbara County.
The limited supply of available properties along the South Coast of Santa Barbara County keeps values higher compared to other areas of California and of the United States. Along the South Coast of Santa Barbara County as of January 1st there were 59 active House/PUD listings (down from 83 in December) and 11 active Condominium listings available (down from 25 in December). Historically there has been much more inventory available in the higher price ranges than in the lower ranges; as of December 1st, 40.7% (up from 36% in December) of the 59 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 and as of January 1st there were no bank-owned listings for sale or pending on the South Coast of Santa Barbara County. There was one bank-owned sale in January 2021 on Cresta Avenue @ $3,040,000 and one in February 2021 on Las Positas Place @ $981,000. There have been very few distress sales due to homeowner equity rising so quickly which allows them to “bail out” of 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 November 2021 (the latest monthly data available from CoreLogic), the highest recorded median sales price in any California county was in San Mateo County @ $1,575,000 (up 19.5% from 2020) and the lowest recorded county median sales price was in Imperial County @ $270,000 (down .7% from 2020). The median sales price in Santa Barbara County was $745,000 (down 4.5% from 2020) while the median sales price in the City of Santa Barbara was $1,859,000 (up 19.9% from 2020). Other than residential fire-lot sales, the lowest median sales price in any California city was recorded in Trona in San Bernardino County @ $72,000 (up 44% from 2020) and the highest was in Atherton in San Mateo County @ $7,250,000 (up 42.2% from 2020). You could buy 101 median priced Houses in Trona, 9.7 in Santa Barbara County or 3.9 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 $69,900, check https://www.realtor.com/realestateandhomes-detail/13793-Fremont-St_Trona_CA_93562_M25745-98180 . If you care to see a House you can buy in Atherton for $9,888,888, check https://www.realtor.com/realestateandhomes-detail/481-Walsh-Rd_Atherton_CA_94027_M27325-11343 .
The Federal Reserve (the Fed) has maintained a near zero rate since early 2020 due to the negative effects on the economy due to COVID-19, the Delta variant and now the Omicron variant. The minutes from the December 14-15 meeting include this: “Participants generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated. Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve’s balance sheet relatively soon after beginning to raise the federal funds rate.” As of January 5th you could lock in a $661,000 30-year fixed rate loan at 3.32%, up from 2.75% in December. 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 $661,000 mortgage in 1981 would have been $10,302/month; as of January 6th it would be $2,902/month (up from $2,698 a month ago).
Of the 138 sales in December 2021, 98 were over $1,000,000 which equates to 71% of the total sales, down from 71.6% in November. 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 Property Shark, California has 89 of the 127 most expensive median priced sales’ ZIP codes in the country with New York state being the next highest with 17 ZIPs. Santa Barbara has 4 of the pricey ZIPs with Montecito’s 93108 ZIP coming in at #7 nationally. https://www.propertyshark.com/Real-Estate-Reports/most-expensive-zip-codes-in-the-us
According to CNN the national average for all cash real estate sales is 25% in 2021 (up from 15% in 2020); on the South Coast in December 2021, 28% were cash sales, down from 34% in October. See the attached list of the 138 properties sold on the South Coast of Santa Barbara County in December 2021 and/or contact me for information on specific sales.
On December 22nd the Conference Board reported that the Consumer Confidence Index was 115.8, up from 111.9 in November. In recent years the highest recent Index level recorded was 137.9 in October 2018 and it was more recently as high as 132.6 in February 2020, prior to the 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 improved further in December, following a very modest gain in November,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation Index dipped slightly but remains very high, suggesting the economy has maintained its momentum in the final month of 2021. Expectations about short-term growth prospects improved, setting the stage for continued growth in early 2022. The proportion of consumers planning to purchase homes, automobiles, major appliances, and vacations over the next six months all increased.” To review the full report: https://conference-board.org/data/consumerconfidence.cfm .
As for the worldwide cost of living as of January 2022, Expatistan compiled an index of 159 major metropolitan areas. Expatistan’s list indicates #3 San Francisco, CA with a 243 Price Index score is the most expensive area in California (a gallon of regular gas costs $4.59, up from $4.41 in December) and the least expensive in the USA to be Albuquerque, NM @ 139 ($2.99/gallon, up from $2.64 in December). Of the top 25 most expensive areas worldwide, 3 (the same 3 cities as in December) are in California including: #10 Los Angeles @ 203 ($4.62/gallon, up from $4.45 in December) and #15 San Jose @ 198 ($4.19/gallon, down from $4.49 in December). The most expensive area to live in the world is #1 Zurich (Switzerland) @ 260 ($6.13/gallon) and the least expensive is #159 Izmir (Turkey) @ 40 ($3.76/gallon). Santa Barbara is not on the list as Expatistan does not rate it as a major metropolitan area, but local gas prices of $4.41/gallon are comparable to larger California urban areas. The cost of living list is interesting to check out if you want to compare the cost of living in cities around the world: https://www.expatistan.com/cost-of-living/index .
On January 6th, Danielle Hale and Sabrina Speianu at realtor.com, wrote about national housing trends @ https://www.realtor.com/research/december-2021-data/ :
“Nationally, the inventory of homes actively for sale in December decreased by 26.8% over the past year, a larger rate of decline compared to the 26.0% drop in November. This marks the third month in a row where the rate of decline compared to last year has worsened. This amounted to 177,000 fewer homes actively for sale on a typical day in December compared to the previous year. The total number of unsold homes nationwide—a metric that includes active listings and listings in various stages of the selling process that are not yet sold—is down 16.1% from December 2020. This is a minor improvement from last month’s 16.2% decline as the inventory share of listings in pending status increased slightly, a sign that buyers are active even with fewer, fast-moving options to choose from.”
Historically the highest Year-to-Date median sales price recorded on the Santa Barbara South Coast had been recorded in 2007 at $1,031,500. The median sales price for all of 2020 was $1,200,000. In December 2021 the median sales price was $1,489,396 basically unchanged from November, but up 24% from 2020. The median sale price had been hovering near 2007’s historic high for most of 2017, 2018, 2019 and started an upward creep in 2020, but in 2021 new record high median sale prices have been set. In December 2021 the average South Coast sales price was $2,760,223.
Based on the Santa Barbara Multiple Listing Service data, as of January 1st, in the City of Santa Barbara there were 17 active House/PUD listings and 29 pending sales, which equates to an extremely low .59 month supply (down from .74 in December) of listings for Buyers to choose from. Generally a “one month’s supply” would indicate the listings would all be sold within one month. Under 3 months of inventory would be considered a basic Seller’s market where demand is high and inventory is scarce, lower than 2 months supply of inventory indicates a heated Seller’s market and lower than 1 month supply indicates a 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 compare everything on the market. Based on Santa Barbara Multiple Listing Service data and as of January 1st, Carpinteria/Summerland had a 2.4 month supply (down from 2.5 in December), Montecito had a 3.7 month supply (up from 3.4 in December), Goleta had a .27 month supply (down from .59 in December) and Hope Ranch had .4 month supply (down from 3 in December). These inventory statistics indicate that Carpinteria/Summerland is in a basic Seller’s market and Montecito is just below a well-balanced market. Santa Barbara, Hope Ranch and Goleta are all in a feverish Seller’s market with less than a month’s worth of available inventory. With a combined total of 67 House/PUD pending sales and only 59 active listings on the South Coast of Santa Barbara County, there is only a .88 month supply of House/PUD listings from which Buyers can choose. With a combined total of 22 Condominium pending sales and only11 active listings on the South Coast of Santa Barbara County, there is only a .5 month supply of Condominium listings from which Buyers can choose.
The ramifications of the concerns about the new variants of COVID-19 and how they have and will continue to affect our world, government spending in response to COVID-19, the Federal & State stimulus packages and property insurance scarcity amid rising premiums are concerns to many Sellers and Buyers along the South Coast of Santa Barbara County. Now that Proposition 19 has taken full effect, 55+ year old homeowners can now transfer their existing real estate tax base to a new home anywhere in California. Historically low interest rates, extremely low inventory and the COVID-19 migratory trend has led to a surge in local property values due to an influx of out of area Buyers. With a glut of qualified Buyers and low inventory, do not expect to see values going down anytime soon. It is good to know that the mortgage lenders are following very strict rules when qualifying Buyers (if they actually need a loan) as most Buyers are obtaining fixed rate loans; according to Bloomberg, 60% of mortgages during the real estate bubble years 2006-2008 had an adjustable rate; fewer than 0.1% of mortgages are adjustable now. 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