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 March 2019
Single Family Residence Market
Median Sales Price = $1,526,217
Lowest Sale Price = $500,000
Highest Sale Price = $6,750,000
Median Sales Price = $712,500
Lowest Sale Price = $325,500
Highest Sale Price = $4,500,000
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
April 12, 2019
Direct from the County Recorder’s Office by way of Fidelity National Title, the overall number of property sales on the South Coast of Santa Barbara County was up 24% from 140 in February 2018 to 174 in February 2019, the January-March median sales price was down 4.4% from 2018 to $1,000,000 in 2019 and the January-March average sales price was down 1.3% from 2018 to $1,552,556 in 2019. In March 2019 there were 106 House/PUD sales with a median sales price of $1,210,000 and an average sales price of $1,526,217. In March 2019 there were 68 Condominium sales with a median sales price of $712,500 and an average sales price of $799,794.
In Carpinteria there were a total of 15 sales in March 2019. The median sales price of the 6 House/PUD sales was $1,215,000 and the average sales price was $1,161,667. In March 2019 the median sales price of the 9 Condominium sales was $535,000 and the average sales price was $540,944. The lowest priced Carpinteria sale in March 2019 was a Condominium on Via Real @ $395,000 and the highest was a House on Santa Monica Road @ $1,510,000.
In Summerland there were no sales in March 2019.
In Montecito there were a total of 12 sales in March 2019. The median sales price of the 9 House/PUD sales was $3,422,333 and the average sales price was $2,851,000. In March 2019 the median sales price of the 3 Condominium sales was $1,525,000 and the average sales price was $2,282,833. The lowest priced Montecito sale in March 2019 was a Condominium on Coast Village Road @ $823,500 and the highest was a House on Middle Road @ $6,750,000.
In Santa Barbara there were a total of 75 sales in March 2019. The median sales price of the 54 House/PUD sales was $1,210,000 and the average sales price was $1,432,750. In March 2019 the median sales price of the 21 Condominium sales was $750,000 and the average sales price was $846,976. The lowest priced Santa Barbara sale in March 2019 was a Condominium on Miramonte Drive @ $500,000 and the highest was a bluff-front House on Shoreline Drive @ $6,275,000.
In Hope Ranch there were a total of 3 sales in March 2019. The median sales price of the 3 House sales was $2,948,000 and the average sales price was $3,307,667. There are no Condominium located in Hope Ranch. The lowest priced Hope Ranch sale in March 2019 was a House on Camino Medio @ $2,400,000 and the highest was a House on Cuervo Avenue @ $4,575,000.
In Goleta there were a total of 69 sales in March 2019. The median sales price of the 34 House/PUD sales was $905,500 and the average sales price was $1,067,897. In March 2019 the median sales price of the 35 Condominium sales was $730,000 and the average sales price was $710,929. The lowest priced Goleta sale in March 2019 was a Condominium on Surfrider Way @ $325,500 (price controlled unit) and the highest was a PUD on Christmas Tree Lane @ $1,877,000.
A limited supply of available properties along the South Coast of Santa Barbara County is keeping values higher than one might expect as compared to many inland areas of California and most areas of the United States. While the appreciation rate along the South Coast has softened, there are still a few areas where multiple offers are possible. On the South Coast of Santa Barbara County as of April 4th there were 384 active House/PUD listings (up from 378 in early March) and 124 active Condominium listings available for purchase (down from 107 in early March). Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 121 (31.5%) of the 384 active House/PUD listings are located in Montecito and Hope Ranch. Compare these low totals to the years 2007 to 2011 when the total number of available listings ranged between 734 and 1,026. Historically the highest number of available listings along the South Coast was recorded in June of 1992 when there were 1,297 listings available for sale, which was a lot of inventory for Buyers to choose from.
There had been no bank owned sales on the South Coast of Santa Barbara since September 2018, but as of March 2019 there were 3 bank-owned sales: a House on Alameda Avenue @ $695,000, a House on Cuna Drive @ $1,060,000 and a Condominium on N. La Cumbre Road @ $577,500. As of March 31st there were no bank-owned listings in escrow. There are now three bank-owned listing available for sale: a House on Painted Cave Road @ $2,695,000, a house on Portesuello Avenue for $1,250,000 and a Condominium on Palmetto Way for $459,900. During the last few years, the foreclosure activity along the South Coast of Santa Barbara County has diminished dramatically. CoreLogic’s latest (October 2018) reports that the national mortgage delinquency rate is now at its lowest point since September 2006: http://blog.rismedia.com/2019/delinquency-rates-drop/ . Also check out California’s foreclosure list by RealtyTrac: California Foreclosure Trends by County .
As of February 2019 (the latest data available from CoreLogic), the highest recorded County median sales price in California was in San Francisco County @ $1,250,000 (the same as in 2018) and the lowest recorded County median sales price was in Siskiyou County @ $165,750 (down 9.8% from 2018). The median sales price in the County of Santa Barbara was $522,750 (down 4.7% from 2018) and the median sales price in the City of Santa Barbara was $1,151,000 (up .01% from 2018). The lowest median sales price recorded in any California city was in Boron in Kern County @ $53,500 (down 10.8% from 2018) and the highest was in Atherton in San Mateo County @ $6,725,000 (down .07% from in 2018). You could buy 126 median priced houses in Boron, 13 in the County of Santa Barbara or 5.8 in the City of Santa Barbara for the same price as 1 house in Atherton. If you care see what you can buy in Boron for $54,000 check out https://www.realtor.com/realestateandhomes-detail/12249-Sierra-View-St_Boron_CA_93516_M19035-03489#photo11. If you care to see what you can buy in Atherton for $6,299,000 check out https://www.realtor.com/realestateandhomes-detail/338-Greenoaks-Dr_Atherton_CA_94027_M23517-99326.
The Federal Reserve (the Fed) last raised the short term lending rate to banks to 2.5% at the December meeting. As of the March meeting, the Fed seems to abandon any further interest rate hikes in 2019 amid signs of an economic slowdown. The yield curve between the 2-year and 5-year notes inverted further and is now approaching levels at which the Fed has actually lowered interest rates in the past. The 30-year mortgage interest rate still remains at a low 4.125%, the lowest rate since last April and far down from 4.94% last November.
Of the 174 sales in March 2019, 82 sold for over $1,000,000 which equates to 47% of the total sales, down from 51% in February, up from 28% in January, down from 52.1% in December and up from 44.4% in November. The South Coast of Santa Barbara is not an inexpensive place to purchase real estate as compared to most areas of the United States, but again many people will pay more to live and invest in Santa Barbara. Of the 174 sales in March 2019, 24% (41) were cash transactions.
On March 26th the Conference Board reported that the Consumer Confidence Index stood at 124.1, down from 131.4 in February, up from 121.7 in January and down from126.6 in December. The highest recent Index levels were 136.4 in November 2018 and 137.9 in October 2018. Lynn Franco, the Director of Economic Indicators at the Conference Board, stated: “Confidence has been somewhat volatile over the past few months, as consumers have had to weather volatility in the financial markets, a partial government shutdown and a very weak February jobs report. Despite these dynamics, consumers remain confident that the economy will continue expanding in the near term. However, the overall trend in confidence has been softening since last summer, pointing to a moderation in economic growth.” The highest historical Consumer Confidence level was last seen in September 2000 when the Index stood at 142.5.
As for the cost of living, Numbeo compiles data for its cost of living index for major cities in the Western Hemisphere. Numbeo’s indices are relative to New York City, which means that for New York City, each index should be 100%. If another city has, for example, a rent index of 120, it means that on an average in that city rents are 20% more expensive than in New York City. If a city has rent index of 70, that means on an average in that city rents are 30% less expensive than in New York City. The highest City index on the 2019 list was New York (#1) @ 100, the highest City Index in California was San Francisco (#4) @ 91.67, the lowest City Index in California was Bakersfield (#45) @ 67.35, the lowest City Index in the United States was Boise, ID, (#79) @ 58.85 and the lowest City Index on the list was Caracas, Venezuela (#119) @ 25.01. This is a very interesting comparison list to check out: Cost of Living in the Western Hemisphere .
For March 2019, data from Realtor.com indicates that 7 of the 20 Hottest Housing Markets in the United States were in California, down from 8 in February; ranging from Sacramento as #4 to Vallejo as #20. It is interesting to note that once again all of California’s Hottest Housing Markets were located in the Northern part of the state. Check out the Realtor.com list at https://www.realtor.com/news/trends/the-hottest-real-estate-markets-in-america-for-march-2019-oh-ohio/
Historically the highest January-March median sales price recorded on the Santa Barbara South Coast was recorded in 2007 at $1,032,500. The March 2019 median sales price was $1,000,000, down from the January-February 2019 median sales price of $1,025,500 and from $1,066,500 in January 2019. The current median sales price has now been hovering near those historic highs for most of the 2017 and 2018 years, which would indicate a leveling off in market values.
Based on the Santa Barbara Multiple Listing System, as of April 4th, in Goleta there were 66 active House/PUD listings and 31 pending sales, which equates to only a 2.1 month supply of listings for Buyers to choose from. Generally under 3 months of inventory would be considered a Seller’s market and lower than 2 months points to a feverish Seller’s market. Historically a 4 to 5 month supply of available inventory would indicate a well-balanced market between Buyers and Sellers and typically over a 6 or 7 month supply would be considered a Buyer’s market with multiple listings to choose from. Based on Santa Barbara Multiple Listing Service data and as of April 4th, Carpinteria/Summerland had a 5 month supply, Montecito had a 6.3 month supply, Santa Barbara had a 2.4 month supply and Hope Ranch had a 4.2 month supply. These inventory statistics indicate that the Santa Barbara, Hope Ranch and Goleta markets are becoming balanced and the Montecito market has been tilting in the Buyer’s favor for months now. There were a total of 124 House/PUD pending sales and only 384 active listings on the South Coast of Santa Barbara County, there is only a combined 3.1 month supply (down from 3.7 in early March) of House/PUD listings for Buyers to choose from. With a total of 47 Condominium pending sales and only 124 active listings on the South Coast of Santa Barbara County, there is only a 2.6 month supply (up from 2 in early March) of Condominium listings for Buyers to choose from. It is too soon to know how the Montecito disaster will affect the Montecito values in the very long term, but pressures on Hope Ranch and the upper price rangers of Santa Barbara and Goleta housing supply still seems to be very evident. Buyers do seem to be moving much more cautiously than they did just a few months ago and some are taking their time assessing all their options along the South Coast of Santa Barbara County. There is a very informative article by local economist Robert Niehaus on the impact of the January 9, 2018 debris flow on the Montecito real estate market, check it out http://www.rdniehaus.com/rdn/wp-content/uploads/2019/03/RDN_Montecito-Debris-Flow_Housing-Market-Impact_03-19.pdf
The ramifications of the Federal tax cuts, planned increase in government spending, limits on mortgage interest deductions, rising insurance premiums, the trade tensions between China and Europe, the Federal $10,000 limit on State tax deductions and the memories of the fire damage & debris flows in Montecito are a concern to many Buyers along the South Coast of Santa Barbara. The median sales priced Santa Barbara home would translate to a real estate tax of $14,190 per year. Only time will tell how these new tax rules will play out and how they will affect our real estate values in the long run. Supply and demand dynamics have and will 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