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 2021
Single Family Residence Market
Median Sales Price = $1,914,000
Lowest Sale Price = $599,000
Highest Sale Price = $19,375,000
Median Sales Price = $733,000
Lowest Sale Price = $475,000
Highest Sale Price = $3,600,000
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, 2021
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 7% from 128 in February 2020 to 157 in February 2021. In February 2021 there were 110 House/PUD (Planned Unit Development) sales, up 20% from 2020, with a median sales price of $1,914,000 and an average sales price of $2,831.259. In February 2021 there were 27 Condominium sales, down 25% from 2020, with a median sales price of $865,000 and an average sales price of $1,107,652. There have been a total of 294 residential sales in 2021 (up 6% from 2020), with a median sales price of $1,485,750 (up 34% from 2020) and average sales price of $2,351,871 (up 59% from 2020).
In Carpinteria there were a total of 10 sales in February 2021, up from 9 in January. In February 2021 the median price of the 6 House/PUD sales was $2,175,000 and the average price was $3,732,500. In February 2021 the median price of the 4 Condominium sales was $710,000 and the average price was $692,500. The lowest priced Carpinteria sale in February 2021 was a Condominium on Eighth Street @ $475,000 and the highest was a beachfront House on Sand Point Road @ $12,750,000.
In Summerland there was 1 sale in February 2021, down from 6 in January. In February 2021 the median and average sales price of the House/PUD sale was $1,850,000. There were no Condominium sales in February 2021, down from 2 in January. The single Summerland sale was on Golden Gate Avenue at $1,850,000.
In Montecito there were a total of 28 sales in February 2021, up from 27 in January. In February 2021 the median price of the 25 House/PUD sales was $4,175,000 and the average price was $5,244,750. In February 2021 the median price of the 3 Condominium sales was $1,700,000 and the average price was $2,186,667. The lowest priced Montecito sale in February 2021 was a House on Coyote Road @ $669,000 and the highest was an Estate on E. Mountain Drive @ $19,375,000.
In Santa Barbara there were a total of 57 sales in February 2021, down from 67 in January. In February 2021 the median price of the 45 House/PUD sales was $1,792,500 and the average price was $2,032,267. In February 2021 the median price of the 12 Condominium sales was $1,325,000 and the average price was $1,234,383. The lowest priced Santa Barbara sale in February 2021 was a Condominium on Via Andorra @ $525,000 and the highest was a House on Las Alturas Road @ $5,400,000.
In Hope Ranch there were a total of 7 sales in February 2021, down from 8 in January. In February 2021 the median price of the 7 House sales was $4,500,000 and the average price was $4,264,286. There are no PUD’s or Condominiums in Hope Ranch. The lowest priced Hope Ranch sale in February 2021 was a House on Estrella Drive @ $2,400,000 and the highest was an Estate on Cresta Avenue @ $6,800,000.
In Goleta there were a total of 33 sales in February 2021, down from 41 in January. In February 2021 the median price of the 25 House/PUD sales was $1,043,500 and the average price was $1,181,120. In February 2021 the median price of the 8 Condominium sales was $710,000 and the average price was $720,500. The lowest priced Goleta sale in February 2021 was a Condominium on Calle Real @ $529,000 and the highest was a House on Cambridge Drive @ $2,720,000.
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 only showings of listings. Due to virus concerns and stay-at-home orders, many Sellers have completely cancelled their listings for a time and this only exacerbated the lack of housing inventory on the market. While the unemployment rate has leveled off and is slowly 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. We have been tracking where the Buyers are coming from and at least 43% are coming not only from out of the County, but also many from out of State and a few from out of the Country.
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 March 5th there were 106 active House/PUD listings (down from 125 in February) and 26 active Condominium listings available (down from 39 in February). Historically there has been much more inventory available in the higher price ranges than in the lower ranges; as of February 5th 46% of the 106 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 March 5th there were no bank owned listings for sale or pending sales on the South Coast of Santa Barbara County. There was one bank-owned sale in January and now one February sale on Las Positas Place @ $981,000. There have been very few distress sales due to home equity rising quickly allowing Owners to “bail out” their financially distressed properties. To check out California’s foreclosure by county, visit this RealtyTrac link: California Foreclosure Trends by County .
As of January 2021 (the latest monthly data available from CoreLogic), the highest recorded County median sales price in California was in San Mateo County @ $1,300,000 (up 2% from 2020) and the lowest recorded County median sales price was in Siskiyou County @ $185,000 (down 4.4% from 2020). The median sales price in the County of Santa Barbara was $635,000 (up 15.5% from 2020) while the median sales price in the City of Santa Barbara was $1,560,250 (up 34.6% from 2020). Other than residential fire-lot sales, the lowest median sales price recorded in any California city was in Needles in San Bernardino County @ $66,500 (down 1.5% from 2020) and the highest was in Atherton in San Mateo County @ $7,000,000 (down 4.1% from 2020). You could buy 105 median priced Houses in Needles, 11 in the County of Santa Barbara or 4.5 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 Needles for $45,000, check https://www.realtor.com/realestateandhomes-detail/409-H-St_Needles_CA_92363_M10506-74837 . If you care to see an Estate you can buy in Atherton for $6,988,000, check https://www.realtor.com/realestateandhomes-detail/35-Edge-Rd_Atherton_CA_94027_M14500-26677 .
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. “We expect that as the economy reopens and hopefully picks up, we will see inflation move up through base effects,” Powell said during a Wall Street Journal conference on March 4th. “That could create some upward pressure on prices. We’re very mindful and I think it’s a constructive thing for people to point out potential risks. I always want to hear that,” he said. “But I do think it’s more likely that what happens in the next year or so is going to amount to prices moving up but not staying up and certainly not staying up to the point where they would move inflation expectations materially above 2%.” Powell said that he doesn’t expect any move up in prices to be long lasting or enough to change the Fed from its “accommodative monetary policy”. As of March 5th you could lock in a $510,000 30-year fixed rate loan at 3.125%, up from 2.65% in February. Historically the lowest 30-year mortgage interest rate since 1970 was recorded in 2012 @ 3.31%, so February 2021’s 2.65% rate is now the new low. 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 March 5th it would be $2,185/month.
Of the 137 sales in February 2021 there were 104 over $1,000,000 which equates to 79.9% of the total sales, up from 69.6% in January. 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 2021, 29% were cash sales, down from 30% in January. See the attached list of the 237 properties sold on the South Coast of Santa Barbara County in February 2021 and/or contact me for information on specific sales.
On February 23rd the Conference Board reported that the Consumer Confidence Index stood at 91.3 up from 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. “After three months of consecutive declines in the Present Situation Index, consumers’ assessment of current conditions improved in February,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “This course reversal suggests economic growth has not slowed further. While the Expectations Index fell marginally in February, consumers remain cautiously optimistic, on the whole, about the outlook for the coming months. Notably, vacation intentions—particularly, plans to travel outside the U.S. and via air—saw an uptick this month, and are poised to improve further as vaccination efforts expand.” To review the full report: https://conference-board.org/data/consumerconfidence.cfm .
As for the cost of living as of March 2021, Expatistan compiled an index of 198 major metropolitan areas worldwide. Expatistan’s list indicates New York, NY @ #4 is the most expensive area in the USA with a Price Index score of 233 (a gallon of regular gas costs $2.75) and the least expensive are #114 San Juan, PR @ 120 ($3.09/gallon) and #112 Memphis, TN @ 122 ($2.09/gallon). Of the top 25 most expensive areas worldwide, 3 are in California: #6 San Francisco @ 230 ($4.31/gallon), #18 Los Angeles @ 195 ($3.61/gallon) and #25 San Diego @ 188 ($3.29/gallon). The most expensive area to live in the world is #1 Hamilton (Bermuda) @ 280 ($8.50/gallon) and the least expensive is #198 Tbilisi (Georgia/Russia) @ 52 ($2.96/gallon). Santa Barbara is not on the list as Expatistan does not rate it as a major metropolitan area, but gas prices are similar to San Francisco’s. 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 .
As of March 4th, Danielle Hale, the Chief Economist at realtor.com, wrote about February’s Housing Trends:
- Median listing prices grew at 14.0 percent over last year, notching the 29th consecutive week of double-digit price growth. The intractable gap between supply and demand persists, so further price gains are expected until either supply ramps up or demand eases. There are reasons to believe the intensity of this trend could lessen. First, vaccine roll-out is expected to ease seller anxiety which should improve the supply trends throughout the year. Additionally, although they remain low, mortgage rates have begun to increase and are expected to rise further later in the year, thus affordability will challenge buyer demand in the months ahead.
- New listings–a measure of sellers putting homes up for sale–continue to fall behind the year ago pace, registering 27 percent lower this week. We saw a clear upswing in newly listed homes at the end of 2020, but 2021 has been marked by large and consistent declines thus far. Despite early weakness, we expect to see new listings grow in March and April as they traditionally do heading into spring, but there’s a sizable gap–more than 200,000 fresh listings–to make up. With existing inventory of homes for sale continuing to be limited, homebuyers are increasingly turning to new construction, helping to fuel continued increases in new home sales so far this year.
- Total active inventory continues to decline, dropping 50 percent. With buyers active in the market and sellers still slow to put homes up for sale, homes are selling quickly and the total number actively available for sale at any point in time continues to decline.
- Time on market was 6 days faster than last year meaning that quick decisions are still the norm, but the pace of quickening again slowed. Buyers will still need to be targeted and decisive to succeed in this fast-moving housing market.
To read the full article, check out https://www.realtor.com/research/weekly-housing-trends-view-data-week-feb-27-2021/
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 2020 median sales price was $1,200,000. In February 2021 the median sales price jumped to $1,485,750. The median sale price had been hovering near 2007’s historic high for most of 2017, 2018, 2019 but now has been setting new records and it is up 24% from February 2020. The February 2021 average sale price was $2,351,871, up from $2,222,500 in January.
Based on the Santa Barbara Multiple Listing Service, as of March 5th, in the City of Santa Barbara there were 35 active House/PUD listings and 51 pending sales, which equates to a very low .69 month supply (down from .74 in February) 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 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 see everything on the market. Based on Santa Barbara Multiple Listing Service data and as of March 5th, Carpinteria/Summerland had a 1.4 month supply (up from 1.3 in January), Montecito had a 1.5 month supply (dramatically down from 3.9 in February), Goleta had a .32 month supply (down from .62 in February) and Hope Ranch had an amazingly low .43 month supply (down from .56 in February). These inventory statistics indicate that Santa Barbara, Hope Ranch and Goleta are in a feverish Seller’s market with a month or less of inventory. Carpinteria/Summerland and Montecito are in a heated Seller’s market. 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 1.5 month supply (down from 6.6 months in March 2020) and Hope Ranch with only a .43 month supply (down from 6 months in March 2020). With a combined total of 127 House/PUD pending sales and only 106 active listings on the South Coast of Santa Barbara County, there is only a .83 month supply of House/PUD listings from which to choose. With a combined total of 53 Condominium pending sales and only 26 active listings on the South Coast of Santa Barbara County, there is only a .49 month supply of Condominium listings from which to choose.
The ramifications of the concerns about COVID-19 and how it has and will affect our world, government spending in response to COVID-19, home insurance availability and rising premiums, trade tensions, political tensions, the Federal $10,000 limit on State tax deductions and the memories of the fire damage and debris flows in Montecito are concerns to many Sellers and Buyers along the South Coast of Santa Barbara County. That being said, pent-up demand for homes along the South Coast (from national and international Buyers), low interest rates, and low inventory have boosted real estate values along the South Coast of Santa Barbara County. COVID-19 has actually increased real estate values as Buyers appear to be flocking to the “safe haven” of the Santa Barbara area. The current lack of available inventory in all areas along the South Coast is driving values upward. As always, supply and demand dynamics have and will continue to affect the South Coast of the Santa Barbara Real Estate Market 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