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 June 2020
Single Family Residence Market
Median Sales Price = $1,425,000
Lowest Sale Price = $650,000
Highest Sale Price = $14,650,000
Median Sales Price = $650,000
Lowest Sale Price = $410,000
Highest Sale Price = $3,150,000
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
July 16, 2020
Direct from the County Recorder’s Office by way of Fidelity National Title, the total number of residential sales on the South Coast of Santa Barbara County was down 13% from 185 in June 2019 to 161 in June 2020. In June 2020 there were 118 House/PUD sales, down 5% from 2019, with a median sales price of $1,425,000 and an average sales price of $2,296,115. In June 2020 there were 43 Condominium sales, down 31% from 2019, with a median sales price of $650,000 and an average sales price of $811,442. In a combined total, there were 725 residential sales from January through June which is down 24% from 2019, with a median sales price of $1,101,000 and an average sales price of $1,605,489.
In Carpinteria there were a total of 18 sales in June 2020, up from 2 in May. In June 2020 the median sale price of the 12 House/PUD sales was $1,040,000 and the average sale price was $1,769,795. In June 2020 the median sale price of the 6 Condominium sales was $503,500 and the average sales price was $506,417. The lowest priced Carpinteria sale in June 2020 was a Condominium on Hickory Street @ $410,000 and the highest was an oceanfront House on Sand Point Road @ $9,650,000.
In Summerland there were a total of 5 sales in June 2020, up from no sales in May. In June 2020 the median sale price of the 5 House/PUD sales was $5,103,500 and the average sale price was $4,845,200. There were no Summerland Condominium sales in June 2020. The lowest priced Summerland sale in June 2020 was a House on Calle Culebra @ $1,522,500 and the highest was an Estate on Ladera Lane @ $7,900,000.
In Montecito there were a total of 18 sales in June 2020, the same number as in May. In June 2020 the median sale price of the 12 House/PUD sales was $3,937,500 and the average sale price was $4,961,273. In June 2020 the median sale price of the 6 Condominium sales was $2,850,000 and the average sale price was $2,570,833. The lowest priced Montecito sale in June 2020 was a House on Circle Drive @ $1,125,000 and the highest was an Estate on Rockbridge Road @ $14,650,000.
In Santa Barbara there were a total of 67 sales in June 2020, up from 34 in May. In June 2020 the median sale price of the 52 House/PUD sales was $1,475,000 and the average sale price was $1,617,663. In June 2020 the median sale price of the 15 Condominium sales was $708,000 and the average sale price was $797,600. The lowest priced Santa Barbara sale in June 2020 was a Condominium on Richland Drive @ $439,000 and the highest was a House on Cima Linda Lane @ $4,294,000.
In Hope Ranch there were a total of 3 sales in June 2020, up from 1 in May. In June 2020 the median sale price of the 3 House/PUD sales was $2,572,000 and the average sale price was $2,615,667. There are no Condominiums in Hope Ranch. The lowest priced Hope Ranch sale in June 2020 was a House on Laguna Blanca Drive @ $2,450,000 and the highest was a House on Estrella Drive @ $2,825,000.
In Goleta there were a total of 43 sales in June 2020, up from 30 in May. In June 2020 the median sale price of the 24 House/PUD sales was $975,000 and the average sale price was $1,015,188. In June 2020 the median sale price of the 19 Condominium sales was $607,500 and the average sale price was $640,895. The lowest priced Goleta sale in June 2020 was a Condominium on Hollister Avenue @ $450,000 and the highest was a House on Via Bolzano @ $1,650,000.
The COVID-19 pandemic has not only affected our daily lives, but how everyone buys and sells real estate. Open houses and Broker Caravans are not allowed and serious protocols are in place for in-person by appointment only showings of listings. Due to virus concerns many Sellers have completely cancelled their listings and this only has exacerbated the lack of housing inventory on the market. It is hard to grasp how to analyze the future effects of the virus on how we live our lives. The unemployment rate remains high, mortgage interest rates remain extremely low and there appears to be pent-up Buyer demand for housing after the loosening of the stay-at-home restrictions. Also, some owners have come to the realization that they need a larger home to accommodate a home office, so they may become Sellers and Buyers.
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 July 1st there were 270 active House/PUD listings (down from 318 on June 5th) and 114 active Condominium listings (up from 108 on June 5th) available for sale. Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 101 (37%) of the 170 active House/PUD listings are located in the higher valued Montecito and Hope Ranch areas. Compare the 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 1,297 active listings available for sale.
During each month of 2019 and 2020, sales of bank-owned properties ranged between zero and three. There has been only 1 bank-owned sale along the South Coast of Santa Barbara County in 2020. As of June 1st there were no bank owned listings for sale or in escrow on the South Coast of Santa Barbara County. There have been a few distress sales, but foreclosure activity along the South Coast of Santa Barbara County has diminished dramatically. To check out California’s foreclosure by county, visit this RealtyTrac link: California Foreclosure Trends by County . Dr. Nothaft, the Chief Economist for CoreLogic, has recently stated “Home loan delinquency and foreclosure rates were the lowest in a generation before the COVID-19 pandemic hit. Recession-induced job losses will fuel delinquencies. However, wide-spread foreclosures across America will likely be averted because of the home equity buffer that homeowners have and the available forbearance programs. Our Home Equity Report found that at the start of 2020, homeowners with a mortgage also had an average of $177,000 in home equity.”
As of May 2020 (the latest data available from CoreLogic), the highest recorded County median sales price in California was in San Mateo County @ $1,480,000 (same as in 2019) and the lowest recorded County median sales price was in Plumas County @ $165,000 (down 42.5% from 2019). The median sales price in the County of Santa Barbara was $520,000 (down 8.6% from 2019) and the median sales price in the City of Santa Barbara was $1,230,000 (down 2.6% from 2019). The lowest median sales price recorded in any California city was in Fall River Mills in Shasta County @ $30,000 (down 93.3% from 2019) and the highest was in Atherton in Santa Mateo County @ $11,275,000 (up 3.4% from 2019). You could buy 376 median priced Houses in Fall River Mills, 22 in the County of Santa Barbara or 9 in the City of Santa Barbara for the same price as 1 House in Los Altos. If you care to see a property you can buy in the Fall River Mills for $48,000 check out https://www.realtor.com/realestateandhomes-detail/Cassel-Fall-River-Rd_Fall-River-Mills_CA_96028_M20890-90539?view=qv . If you care to see a House you can buy in Atherton for $11,750,000 check out https://www.realtor.com/realestateandhomes-detail/119-Selby-Ln_Atherton_CA_94027_M17119-46242?view=qv .
The Federal Reserve (the Fed) raised the overnight rate four times in 2018 with the last raise to 2.5% in December 2018 and then in 2019 the Fed lowered the overnight interest rate numerous times, thereby reversing all of 2018’s rate increases. At their June 30th meeting the Feds’ chairperson Walters said “While recent economic data offer some positive signs, we are keeping in mind that more than 20 million Americans have lost their jobs, and that the pain has not been evenly spread. The rise in joblessness has been especially severe for lower-wage workers, for women, and for African Americans and Hispanics. This reversal of economic fortune has caused a level of pain that is hard to capture in words as lives are upended amid great uncertainty about the future.” And then we heard something that has never been heard from a Fed official: The Dallas Fed President, Robert Kaplan, said “The pace of the economic recovery depends on how well the country manages the spread of coronavirus ….. and the most important thing for the economy now is wearing protective face coverings.” To review the entire report check out https://www.federalreserve.gov/newsevents/testimony/powell20200630a.htm . As of July 1st you could get a $510,000 30-year fixed rate loan at 3.07%, or less. Historically the lowest 30-year mortgage interest rate since 1970 was recorded in 2012 @ 3.31%, so we are now setting a new average low @ 3.07%. The highest mortgage rate was recorded in 1981 @ 18.63%. If you got a $510,000 mortgage in 1981, your payment would have been $7,949/month; today it would be $2,170/month.
Of the 161 sales in June 2020 there were 93 over $1,000,000 which equates to 57.8% of the total sales. The South Coast of Santa Barbara is not an inexpensive place to purchase real estate as compared to most areas of the United States, but again many people will pay more to live and invest in Santa Barbara. According to Forbes the national average for all cash real estate sales is 20%; on the South Coast in June 2020, 25% were cash sales, down from 27% in May. See the attachment for the total list of the 161 properties sold on the South Coast of Santa Barbara County in June 2020 and/or contact me for more information.
On June 30th the Conference Board reported that the Consumer Confidence Index stood at 98.1, up from 85.9 in May. In recent years the highest recent Index level recorded was 137.9 in October 2018 and it was as high as 132.6 in February 2020. Historically the highest Consumer Confidence Index level was recorded in September 2000 when the Index stood at 142.5. “Consumer Confidence partially rebounded in June but remains well below pre-pandemic levels,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The re-opening of the economy and relative improvement in unemployment claims helped improve consumers’ assessment of current conditions, but the Present Situation Index suggests that economic conditions remain weak. Looking ahead, consumers are less pessimistic about the short-term outlook, but do not foresee a significant pickup in economic activity.” To see the full report: https://conference-board.org/data/consumerconfidence.cfm .
As for the cost of living as of July 2020, Expatistan has compiled data from 239 major metropolitan areas worldwide. Expatistan’s list indicates Mountain View, CA at #4 is the most expensive area in the USA with a Price Index score of 259 and Memphis, TN at #130 is the least expensive with a score of 129. Of the top 20 most expensive areas worldwide, 4 are in California: #4 Mountain View @ 259, #7 San Francisco @ 245, #15 Oakland @ 220, and #20 Los Angeles @ 208. The most expensive area to live in the world is #1 Hamilton (Bermuda) @ 294 and the least expensive is #239 Coimbatore (India) @ 52. Santa Barbara is not on the list as Expatistan has not rated it as a major metropolitan area. This is an interesting list to check out if you want to compare the cost of living in different cities around the world: https://www.expatistan.com/cost-of-living/index .
In his June 25, 2020 article, Nicolas Bedo at Realtor.com® wrote about the Luxury Market, concentrating on the New York market: “The most recent listings data from May shows key inventory metrics moving in the right direction. April was a tough month for all levels of the housing market, but the luxury housing market showed signs of resilience in May with listings garnering listing views higher than pre-COVID observations, and luxury home price growth outpacing the mid-market. That said, not everything is back to normal. In particular, realtor.com listings data suggests that luxury homebuyers are favoring locales farther away from larger urban centers.” This trend seems to have positively affected our market as many Buyers want to escape the “larger urban centers” and find a home in Santa Barbara. Check out the complete article: https://www.realtor.com/research/tag/luxury-homes/
Historically the highest Year-to-Date median sale price recorded on the Santa Barbara South Coast was recorded in 2007 at $1,031,500. In June 2020 the Year-to-Date median sale price was $1,101,000 down from $1,101,50 in May. The median sale price has been hovering near that historic high for most of 2017, 2018, 2019 and now well into 2020. This is an indication of a leveling off in median sale price values along the South Coast of Santa Barbara. The June 2020 average sale price was $1,605,489, which is still well below the historical average sale price recorded in 2007 at $1,787,898.
Based on the Santa Barbara Multiple Listing Service, as of July 1st, in the City of Santa Barbara there were 110 active House/PUD listings and 59 pending sales, which equates to a 1.9 month supply of listings for Buyers to choose from. Generally up to 3 months of inventory would be considered a Seller’s market where demand is high and inventory is scarce; lower than 2 months of inventory points to a more feverish Seller’s market. Historically a 4 to 5 month supply of available inventory would indicate a fairly well-balanced market between Buyers and Sellers. Typically a 6+ month supply is considered to be a Buyer’s market where inventory is plentiful; Buyers are slower to make decisions and want to see everything on the market. Based on Santa Barbara Multiple Listing Service data and as of July 1st, Carpinteria/Summerland had a 2.3 month supply, Montecito had a 2.3 month supply, Goleta had a .9 month supply and Hope Ranch had a 3.6 month supply. All these inventory ratios are much lower than in early June. These inventory statistics indicate that Goleta is in a feverish Seller’s market with less than a month’s worth of inventory. The City of Santa Barbara, Carpinteria/Summerland and Montecito have all moved into a Seller’s Market. Hope Ranch is in a balanced market for the first time in quite a while. With a total of 147 House/PUD pending sales and only 270 active listings on the South Coast of Santa Barbara County, there is only a 1.8 month supply of House/PUD listings from which to choose from. With a total of 58 Condominium pending sales and only 114 active listings on the South Coast of Santa Barbara County, there is a 2 month supply of Condominium listings for Buyers from which to choose.
The ramifications of the concerns about COVID-19 and how it has & will affect our world, government spending in response to COVID-19, home insurance availability & rising premiums, trade tensions, the tumultuous stock market, demonstrations, the Federal $10,000 limit on State tax deductions and the memories of the fire damage & debris flows in Montecito are concerns to many Sellers and Buyers along the South Coast of Santa Barbara County. That being said, Santa Barbara Buyers realize that pent-up demand, low interest rates and low inventory have boosted real estate values along the South Coast of Santa Barbara Country. The trajectory of COVID-19 itself cannot be predicted or what it may mean to our economy in the future. Lack of available inventory as compared to last July is continuing to drive our markets, especially in Goleta and the City of Santa Barbara. 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 real estate related questions.
Stan Tabler, CRS, GRI, ABR, GREEN
801 Chapala Street
Santa Barbara, CA 93101
CalBRE Brokers License #00774377 since 1980