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 October 2021
Single Family Residence Market
Median Sales Price = $1,803,750
Lowest Sale Price = $700,000
Highest Sale Price = $18,000,000
Median Sales Price = $868,000
Lowest Sale Price = $500,000
Highest Sale Price = $3,075,000
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
November 16, 2021
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 36% from 268 in October 2020 to 172 in October 2021. In October 2021 there were 118 House/PUD (Planned Unit Development) sales, down 36% from 2020, with a median sales price of $1,803,750 (up 3% from 2020) and an average sales price of $2,973,085 (down 7% from 2020). In October 2021 there were 54 Condominium sales, (down 36% from 2020) with a median sales price of $868,000 (up 10% from 2020) and an average sales price of $1,138,119 (up 23% from 2020). Year to date, there have been a total of 1,923 residential sales in 2021 (up 14% from 2020), with a median sales price of $1,498,000 (up 25% from 2020) and average sales price of $2,450,000 (up 23% from 2020).
In Carpinteria there were a total of 15 sales in October 2021, down from 16 in September. In October 2021 the median price of the 9 House/PUD sales was $1,812,500 and the average price was $3,044,944. In October 2021 the median price of the 6 Condominium sales was $1,027,500 and the average price was $1,160,000. The lowest priced Carpinteria sale in October 2021 was a Condominium on 8th Street @ $680,000 and the highest was a House on Beach Club Road @ $7,750,000.
In Summerland there were a total of 3 sales in October 2021, up from 2 in September. In October 2021 the median price of the 3 House/PUD sales was $2,999,000 and the average price was $8,133,000. In October 2021 there were no Condominium sales in Summerland. The lowest priced Summerland sale in October 2021 was a House on Hollister Street @ $1,900,000 and the highest was an Estate on Vista Oceano Lane @ $19,500,000.
In Montecito there were a total of 22 sales in October 2021, down from 26 in September. In October 2021 the median price of the 18 House/PUD sales was $5,051,000 and the average price was $5,665,250. In October 2021 the median price of the 4 Condominium sales was $2,200,000 and the average price was $2,085,000. The lowest priced Montecito sale in October 2021 was a Condominium on Fairway Road @ $865,000 and the highest was a PUD on Hammond Drive @ $10,000,000.
In Santa Barbara there were a total of 77 sales in October 2021, down from 80 in September. In October 2021 the median price of the 53 House/PUD sales was $1,750,000 and the average price was $2,287,023. In October 2021 the median price of the 24 Condominium sales was $990,000 and the average price was $1,224,392. The lowest priced Santa Barbara sale in October 2021 was a Condominium on Richland Drive @ $500,000 and the highest was a House on Campanil Drive @ $10,100,000.
In Hope Ranch there were a total of 3 sales in October 2021, up from 2 in September. In October 2021 the median price of the 3 House sales was $6,800,000 and the average price was $9,033,333. There are no PUDs or Condominiums in Hope Ranch. The lowest priced Hope Ranch sale in October 2021 was a House on Monte Drive @ $2,300,000 and the highest was an Estate on Marina Drive @ $18,000,000.
In Goleta there were a total of 52 sales in October 2021, up from 45 in September. In October 2021 the median price of the 32 House/PUD sales was $1,225,000 and the average price was $1,522,933. In October 2021 the median price of the 20 Condominium sales was $785,000 and the average price was $814,650. The lowest priced Goleta sale in October 2021 was a Condominium on Armitos @ $500,000 and the highest was a House on Dorwin Lane @ $5,750,000.
The COVID-19 pandemic has not only affected our daily lives, but also how everyone buys and sells real estate. As of June, open houses and Broker Tours were once again allowed. 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 Delta 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 November 1st there were 75 active House/PUD listings (down from 112 in October) and 26 active Condominium listings available (down from 27 in October). Historically there has been much more inventory available in the higher price ranges than in the lower ranges; as of November 1st, 27% (down from 33% in September) of the 75 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 ranged 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.
In all of 2021 there have been only 2 bank-owned sales along the South Coast of Santa Barbara County and as of November 1st there were no bank-owned listings for sale or pending on the South Coast of Santa Barbara County. There was 1 bank-owned sale in January on Cresta Avenue @ $3,040,000 and 1 in February 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 September 2021 (the latest monthly data available from CoreLogic), the highest recorded median sales price in any California county was in San Mateo County @ $1,545,000 (up 7.3% from 2020) and the lowest recorded county median sales price was in Siskiyou County @ $270,000 (up 21.3% from 2020). The median sales price in Santa Barbara County was $707,250 (down 3.1% from 2020) while the median sales price in the City of Santa Barbara was $1,673,000 (up 10.3% 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 @ $66,000 (there were no sales in September 2020) and the highest was in Atherton in San Mateo County @ $10,217,500 (up 24.2% from 2020). You could buy 155 median priced Houses in Trona, 14.5 in Santa Barbara County or 6.1 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 $65,000, check https://www.realtor.com/realestateandhomes-detail/13804-Benton-St_Trona_CA_93562_M25773-18594 . If you care to see a House you can buy in Atherton for $10,500,000, check https://www.realtor.com/realestateandhomes-detail/49-Magnolia-Dr_Atherton_CA_94027_M19870-43429
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 and now the Delta Variant. “Understanding of how the job market has been affected by the dynamics of the COVID-19 pandemic will take some time”, U.S. Federal Reserve Chair Jerome Powell said on November 3rd and went further to say “There’s room for a whole lot of humility here as we try to think about what maximum employment would be and it’s a different world in so many ways, and we’re very open to that.” As of November 3rd you could lock in a $661,000 30-year fixed rate loan at 3.125%, up from 3% in October. 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 November 3rd it would be $2,832/month.
Of the 172 sales in October 2021, 125 were over $1,000,000 which equates to 73% of the total sales, up from 72.5% in September. 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 CNN the national average for all cash real estate sales is 25% (up from 15% in 2020); on the South Coast in October 2021, 29% were cash sales, the same percentage as in September. See the attached list of the 172 properties sold on the South Coast of Santa Barbara County in October 2021 and/or contact me for information on specific sales.
On October 26th the Conference Board reported that the Consumer Confidence Index was 109.3, down from 115.2 August. 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 negative effects 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 in October, reversing a three-month downward trend as concerns about the spread of the Delta variant eased,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “While short-term inflation concerns rose to a 13-year high, the impact on confidence was muted. The proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October—a sign that consumer spending will continue to support economic growth through the final months of 2021.” To review the full report: https://conference-board.org/data/consumerconfidence.cfm .
As for the worldwide cost of living as of November 2021, Expatistan compiled an index of 165 major metropolitan areas. Expatistan’s list indicates #4 San Francisco, CA with a 250 Price Index score is the most expensive area in California (a gallon of regular gas costs $4.39, up from $3.89 in October) and the least expensive in the USA to be Albuquerque, NM @ 134 ($3.01/gallon up from $2.64 in October). Of the top 25 most expensive areas worldwide, 3 (down from 5 in October) are in California including: #14 San Jose @ 220 ($4.05/gallon up from $3.89 in October) and #16 Los Angeles @ 209 ($3.94/gallon up from $3.82 in October). The most expensive area to live in the world is #1 Grand Cayman (Cayman Islands) @ 266 ($5.23/gallon up from $5.09) and the least expensive is #165 Pune (India) @ 50 ($5.89/gallon up from $5.27 in October). Santa Barbara is not on the list as Expatistan does not rate it as a major metropolitan area, but gas prices of $4.25/gallon are a bit higher 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 .
As of October 30th, Danielle Hale and Sabrina Speianu at realtor.com, wrote about national housing trends @ https://www.realtor.com/research/weekly-housing-trends-view-data-week-oct-30-2021/ . “The housing market’s steady state continued through the end of October. On balance, buyers and sellers haven’t shifted behavior in big ways which means demand still outpaces supply. We continue to see the trends that accompany a sellers’ market, rising home prices, declining inventory, and fast selling homes. The good news for buyers is that while the scales are still generally tipped in favor of sellers, the imbalance isn’t as severe as we saw earlier this year. Indicators from home price growth to the change in active inventory and time on market remain stuck in a narrow range relative to one year ago, neither heating up nor cooling down. Even the relatively variable new listings trend has been fairly steady in the last 7 weeks. The recent stability could indicate that the housing market is charting a relatively smooth transition from the unsustainably high level of activity to a more manageable long-run pace of growth.”
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 October 2021 the median sales price was $1,498,000, basically unchanged from September, but up 25% from 2020. The median sale price had been hovering near 2007’s historic high for most of 2017, 2018, 2019 and into 2020, but now in 2021 new record highs are being set. In October 2021 the average South Coast sales price was $2,540,000.
Based on the Santa Barbara Multiple Listing Service data, as of November 1st, in the City of Santa Barbara there were 28 active House/PUD listings and 44 pending sales, which equates to an extremely low .64 month supply (down from .76 in October) 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 November 1st, Carpinteria/Summerland had a .42 month supply (down from 1.4 in October), Montecito had a 2.1 month supply (down from 2.6 in October), Goleta had a .45 month supply (down from 1.1 in October) and Hope Ranch had .83 month supply (down from 2 in October). These inventory statistics indicate that Carpinteria/Summerland, Santa Barbara, Hope Ranch and Goleta are in a feverish Seller’s market with less than a month’s worth of available inventory. Montecito is just a bit over being in a heated Seller’s market. With a combined total of 104 House/PUD pending sales and only 75 active listings on the South Coast of Santa Barbara County, there is only a .72 month supply of House/PUD listings from which Buyers can choose. With a combined total of 48 Condominium pending sales and only 26 active listings on the South Coast of Santa Barbara County, there is only a .54 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