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 April 2021
Single Family Residence Market
Median Sales Price = $2,050,000
Lowest Sale Price = $800,000
Highest Sale Price = $21,000,000
Median Sales Price = $850,000
Lowest Sale Price = $404,500
Highest Sale Price = $4,770,000
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
May 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 up 132% from 94 in April 2020 to 219 in April 2021. In April 2021 there were 154 House/PUD (Planned Unit Development) sales, up 123% from 2020, with a median sales price of $2,050,000 and an average sales price of $3,123,562. In April 2021 there were 65 Condominium sales, up 160% from 2020, with a median sales price of $850,000 and an average sales price of $1,115,585. There have been a total of 753 residential sales in 2021 (up 57% from 2020), with a median sales price of $1,500,000 (up 35% from 2020) and average sales price of $2,508,455 (up 71% from 2020).
In Carpinteria there were a total of 21 sales in April 2021, down from 30 in March. In April 2021 the median price of the 4 House/PUD sales was $1,901,000 and the average price was $2,446,500. In April 2021 the median price of the 17 Condominium sales was $789,000 and the average price was $839,029. The lowest priced Carpinteria sale in April 2021 was a Condominium on Whimbrel Lane @ $404,500 and the highest was an Estate on Casitas Pass Road @ $4,995,000.
In Summerland there were a total of 1 sale in April 2021, down from 4 in March. In April 2021 the sale price of the House on Olive Street was $1,724,500.
In Montecito there were a total of 44 sales in April 2021, down from 55 in March. In April 2021 the median price of the 36 House/PUD sales was $4,600,000 and the average price was $6,576,222. In April 2021 the median price of the 8 Condominium sales was $2,215,000 and the average price was $2,484,750. The lowest priced Montecito sale in April 2021 was a Condominium on Coast Village Road @ $859,500 and the highest was an Estate on Picacho Lane @ $21,000,000.
In Santa Barbara there were a total of 60 sales in April 2021, down from 99 in March. In April 2021 the median price of the 38 House/PUD sales was $1,725,000 and the average price was $1,988,796. In April 2021 the median price of the 22 Condominium sales was $1,075,000 and the average price was $1,143,886. The lowest priced Santa Barbara sale in April 2021 was a Condominium on San Remo Drive @ $611,500 and the highest was a House on Paterna Road @ $5,950,000.
In Hope Ranch there were a total of 5 sales in April 2021, equal to 5 in March. In April 2021 the median price of the 5 House sales was $5,300,000 and the average price was $5,490,000. There are no Condominiums or PUDs in Hope Ranch. The lowest priced Hope Ranch sale in April 2021 was a Estate on Via Bendita @ $5,000,000 and the highest was an Estate on Creciente Drive @ $6,200,000.
In Goleta there were a total of 55 sales in April 2021, up from 47 in March. In April 2021 the median price of the 37 House/PUD sales was $1,325,000 and the average price was $1,732,959. In April 2021 the median price of the 18 Condominium sales was $728,000 and the average price was $733,667. The lowest priced Goleta sale in April 2021 was a Condominium on Ellwood Beach Drive @ $505,000 and the highest was an Estate on Sunset Ridge Road @ $5,000,000.
The COVID-19 pandemic has not only affected our daily lives, but also how everyone buys and sells real estate. Open houses and Broker Caravans are not allowed and strict safety protocols are in place for any in-person by appointment showings of listings. Due to COVID-19 concerns, many Sellers have avoided listing their homes which has only exacerbated the lack of housing inventory on the market. While the unemployment rate has leveled off and is heading towards pre-COVID rates, historically low mortgage interest rates and the pent-up Buyer demand for housing is driving values of real estate upward on the South Coast. It would seem that one of the unanticipated side effects of COVID-19 is that Buyers are fleeing from highly populated areas to more lightly populated areas, such as along the South Coast.
A limited supply of available properties along the South Coast of Santa Barbara County is keeping values higher than one might expect, even taking into account the effects of COVID-19, as compared to many inland areas of California and most areas of the United States. Along the South Coast of Santa Barbara County as of May 1st there were 85 active House/PUD listings (down from 99 in April, 106 in March and 125 in February) and 25 active Condominium listings available (down from 28 in April, 26 in March and 39 in February). Historically there has been much more inventory available in the higher price ranges than in the lower ranges; as of May 1st , 34.1% of the 85 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 2020 there were only 2 bank-owned sales along the South Coast of Santa Barbara County. As of May 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 on Cresta Avenue @ $3,040,000 and one in February on Las Positas Place @ $981,000. There have been very few distress sales due to homeowner equity rising so quickly that it allows them to “bail out” of their financially distressed properties. To check out California’s foreclosure by county, visit this RealtyTrac link: California Foreclosure Trends by County .
As of March 2021 (the latest monthly data available from CoreLogic), the highest recorded median sales price in any California county was in San Mateo County @ $1,400,000 (up .9% from 2020) and the lowest recorded county median sales price was in Siskiyou County @ $225,000 (up 16.7% from 2020). The median sales price in Santa Barbara County was $659,000 (up 18.3% from 2020) while the median sales price in the City of Santa Barbara was $1,597,500 (up 34% from 2020). Other than residential fire-lot sales, the lowest median sales price recorded in any California city was in Maricopa in Kern County @ $54,500 (no sales in 2020) and the highest was in Atherton in San Mateo County @ $7,388,000 (down 25.2% from 2020). You could buy 136 median priced Houses in Maricopa, 11 in Santa Barbara County or 5 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 Maricopa for only $59,500, check https://www.realtor.com/realestateandhomes-detail/320-Adeline-St_Maricopa_CA_93252_M23094-35957 . If you care to see an Estate you can buy in Atherton for $7,895,000, check https://www.realtor.com/realestateandhomes-detail/459-Walsh-Rd_Atherton_CA_94027_M20155-51876 .
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. “There really are risks out there,” Powell told CBS News’ Scott Pelley on April 11th , “and the principal one is that we will reopen too quickly, people will too quickly return to their old practices, and we’ll see another spike in cases.” As of May 7th you could lock in a $510,000 30-year fixed rate loan at 2.75% down from 3.25% in April. Historically the lowest 30-year mortgage interest rate since 1970 was recorded in February 2021 at 2.65%. The highest mortgage rate was recorded in 1981 @ 18.63%. If you were able to obtain a $510,000 mortgage in 1981, your payment would have been $7,949/month; as of May 7th it would be $2,082/month.
Of the 219 sales in April 2021 there were 169 over $1,000,000 which equates to 77% of the total sales, up from 70% in March. 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 April 2021, 30% were cash sales, down from 35% in March. See the attached list of the 219 properties sold on the South Coast of Santa Barbara County in April 2021 and/or contact me for information on specific sales.
On April 27th the Conference Board reported that the Consumer Confidence Index surged to 121.7, up from 109.7 in March, 90.4 in February and 88.0 in January. In recent years the highest recent Index level recorded was 137.9 in October 2018 and it was recently as high as 132.6 in February 2020, prior to 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 has rebounded sharply over the last two months and is now at its highest level since February 2020,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved significantly in April, suggesting the economic recovery strengthened further in early Q2. Consumers’ optimism about the short-term outlook held steady this month. Consumers were more upbeat about their income prospects, perhaps due to the improving job market and the recent round of stimulus checks.” To review the full report: https://conference-board.org/data/consumerconfidence.cfm .
As for the cost of living as of May 2021, Expatistan compiled an index of 206 major metropolitan areas worldwide. Expatistan’s list indicates #6 Mountain View, CA with a 236 Price Index score is the most expensive area in the USA (a gallon of gas costs $4.27) and the least expensive was San Juan, PR @ 121 ($2.87/gallon). Of the top 25 most expensive areas worldwide, 5 are in California including: #8 San Francisco @ 232 ($4.05/gallon), #17 San Jose @ 201 ($3.95/gallon), #21 Los Angeles @ 195 ($4.02/gallon) and San Diego @ 194 ($3.94/gallon). The most expensive area to live in the world is #1 Hamilton (Bermuda) @ 275 ($8.03/gallon) and the least expensive is #206 Antalya, Turkey @ 54 ($3.46/gallon). Santa Barbara is not on the list as Expatistan does not rate it as a major metropolitan area, but gas prices of $3.89/gallon are similar to other coastal California areas. The cost of living list is interesting to check out if you care to compare the cost of living in cities around the world: https://www.expatistan.com/cost-of-living/index .
“Nationally, the inventory of homes actively for sale in April decreased by 53.0% over the past year, a slightly higher rate of decline compared to the 52.0% drop in March. This amounted to 554,000 fewer homes actively for sale on a typical day in April compared to the previous year. In April, newly listed homes grew by 32.6% on a year-over-year basis compared to the onset of the COVID-19 pandemic last year. While it’s promising that new listings have improved compared to the previous year, they are still down 25.5% from the typical rate of newly listed homes in 2017 to 2019. One reason home sales can continue to occur at high levels despite relatively limited inventory is that homes are selling lightning-fast. 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 21.9% percent from April 2020.”
Historically the highest Year-to-Date median sale price recorded on the Santa Barbara South Coast was recorded in 2007 at $1,031,500. The median sales price for all of 2020 was $1,200,000. In April 2021 the median sales price soared to $1,500,000, up 25% from April 2020. The median sale price had been hovering near 2007’s historic high for most of 2017, 2018 and 2019, but now new record highs have been set each month of 2021. The April 2021 average sale price was $2,508,455 up 71.3% from April 2020.
Based on the Santa Barbara Multiple Listing Service, as of May 1st, in the City of Santa Barbara there were 33 active House/PUD listings and 65 pending sales, which equates to a very low .51 month supply (down from .78 in April) of listings for Buyers to choose from. Generally a “month’s supply” of listings would indicate they would all be sold within a month. Under 3 months of inventory would be considered a 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 May 1st, Carpinteria/Summerland had a .78 month supply (up from .5 in April), Montecito had a .87 month supply (down from 1.1 in April), Goleta had a .48 month supply (up from .27 in April) and Hope Ranch had .5 month supply (up from .43 in April). These inventory statistics indicate that Carpinteria/Summerland, Montecito, Santa Barbara, Hope Ranch and Goleta are all in a feverish Seller’s market with a month or less of inventory. These supply levels are all extremely low for all of the areas, but it is very interesting to note just how low the supplies are in Montecito with a .87 month supply (down from 6.5 month supply in May 2020) and Hope Ranch with only a .5 month supply (down from 11 month supply in May 2020). With a combined total of 143 House/PUD pending sales and only 85 active listings on the South Coast of Santa Barbara County, there is only a .59 month supply of House/PUD listings from which to choose. With a combined total of 41 Condominium pending sales and only 25 active listings on the South Coast of Santa Barbara County, there is only a .61 month supply of Condominium listings from which to choose.
The ramifications of the concerns about COVID-19 and how it has 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, all older (55+) homeowners can now transfer their original real estate tax base to a new home anywhere in California; hopefully this will bring a few more listings onto the market. Historically low interest rates, and extremely low inventory have boosted real estate values along the South Coast of Santa Barbara County. COVID-19 restrictions have actually made many people realize they have the flexibility to work virtually from anywhere; they move simply because they can and these moves to areas like Santa Barbara has led to a surge in property values. 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