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 2018
Single Family Residence/PUD Market
Median Sales Price = $1,280,000
Lowest Sale Price = $410,000
Highest Sale Price = $14,200,000
Condominium Market
Median Sales Price = $653,750
Lowest Sale Price = $375,000
Highest Sale Price = $1,980,000
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
Step 1
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.
Step 2
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.
Step 3
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!
Step 4
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.
Step 5
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.
Step 6
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.
Step 7
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.
Step 8
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.
Step 9
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 14, 2018
Direct from the County Recorder’s Office, the overall number of property sales on the South Coast of Santa Barbara County was down 1% from 112 in February 2017 to 111 in February 2018, the median sales price was up 9% from $991,500 in February 2017 to $1,080,000 in February 2018 and the average sales price was up 16% from $1,372,808 in February 2017 to $1,593,815 in February 2018. In February 2018 there were 83 House/PUD sales with a median sales price of $1,280,000 and an average sales price of $1,878,627. In February 2018 there were 28 Condominium sales with a median sales price of $653,750 and an average sales price of $749,554.
In Carpinteria the number of sales was down 18% from 11 in February 2017 to 9 in February 2018. The median sales price was down 21% from $804,000 in February 2017 to $637,500 in February 2018 and the average sales price was down 5% from $938,636 in February 2017 to $894,889 in February 2018. The lowest priced Carpinteria sale in February 2018 was a Condominium on Eighth Street for $375,000 and there was a tie for highest sale by two homes on Retorno Drive and Canalino Drive, both of which sold for $1,850,000.
In Summerland there were no sales in February 2018, down from 3 in February 2017.
In Montecito the number of sales was down 33% from 15 in February 2017 to 10 in February 2018. The median sales price was down 7% from $2,536,000 in February 2017 to $2,357,000 in February 2018 and the average sales price was up 50% from $2,700,533 in February 2017 to $4,056,500 in February 2018. The lowest priced Montecito sale in February 2018 was a PUD on Coronada Circle for $1,950,000 and the highest was an estate on Alston Road for $14,200,000.
In Santa Barbara the number of sales was up 11% from 56 in February 2017 to 62 in February 2018. The median sales price was up 12% from $1,022,500 in February 2017 to $1,150,000 in February 2018 and the average sales price was up 7% from $1,211,205 in February 2017 to $1,293,476 in February 2018. The lowest priced Santa Barbara sale in February 2018 was a Condominium on San Remo Drive for $530,000 and the highest was a House on Campanil Drive for $2,950,000.
In Hope Ranch the number of sales was up 300% from 2 in February 2017 to 6 in February 2018. The median sales price was up 2% from $3,695,000 in February 2017 to $3,771,000 in February 2018 and the average sales price was up 29% from $3,695,000 in February 2017 to $4,766,167 in February 2018. The lowest priced Hope Ranch sale in February 2018 was a House on Ramitas Road for $2,150,000 and the highest was an estate on Creciente Drive for $11,500,000.
In Goleta the number of sales was down 4% from 25 in February 2017 to 24 in February 2018. The median sales price was up 4% from $790,000 in February 2017 to $819,250 in February 2018 and the average sales price was down 12% from $924,300 in February 2017 to $812,583 in February 2018. The lowest priced Goleta sale in February 2018 was a House on Daley Street for $410,000 and the highest was an House on St. Marys Lane for $1,275,000.
Analysis
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. On the South Coast of Santa Barbara County as of March 8th there were only 279 active House/PUD listings (up from 64 in February) and 94 active Condominium listings (up from 71 in February) available for purchase. Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 103 (37%) of the 279 active House/PUD listings are located in Montecito and Hope Ranch (with the tragedy in Montecito taken into account). 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; now that was a Buyer’s market!
In February 2018 on the South Coast of Santa Barbara there were no bank-owned property sales. As of March 8th there were three bank-owned listings in escrow: a house on Conejo Road for $999,900, a house on Ocean Vista Lane for $1,632,000 and a house on Las Canoas Road for $1,649,000. As of March 8th there was only one bank-owned listing available: a house on Eileen Way for $1,050,000. Compare our market’s 0% in foreclosure sales as a percentage of homes sold to 17% in New Jersey and 6% nationwide. Check out Realty Trac’s list: http://www.realtytrac.com/statsandtrends/foreclosuretrends/ca .
As of January 2018 (the latest data available from CoreLogic) the highest recorded median County sales price in California was in San Mateo County @ $1,215,000 (up 31% from 2017) and the lowest recorded median County sales price was in Siskiyou County @ $164,000 (down 8.6% from 2017). The median sales price in the County of Santa Barbara was $450,000 (down 9.4% from 2017) and the median sales price in the City of Santa Barbara was $1,023,500 (up 2.8% from 2017). The lowest median sales price in any California city was in Boron in Imperial County @ $25,000 (down 64.3% from 2017) and the highest was in Atherton in San Mateo County @ $9,100,000 (up 25.5% from 2017). You could buy 364 median priced houses in Boron (probably the whole town), 20.2 in the County of Santa Barbara or 8.9 in the City of Santa Barbara for the same price as 1 house in Atherton. If you care to see what you can buy in Boron for $35,000, check out https://www.realtor.com/realestateandhomes-detail/27104-Prospect-St_Boron_CA_93516_M18130-59046#photo0 . If you care to see what you can buy in Atherton for $9,995,000 check out https://www.realtor.com/realestateandhomes-detail/65-Selby-Ln_Atherton_CA_94027_M25253-61341#photo2 .
Dr. Jerome Powell is now head of the the Federal Reserve and has stated “my personal outlook for the economy has strengthened since December” and “the thing we don’t want to happen is to get behind the curve.” Many economists expect the Fed to raise borrowing costs up to four times in 2018. Mortgage rates are still below 5% and are near historic lows, but they may not stay that way for long.
Of the 111 sales in February 2018, 61 of them were over $1,000,000 which equates to 55% of the total sales, up from 44% in January and down from 56% in December (which tied for the highest percentage rate recorded in recent history.) 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 111 sales in February 2018, 237 (33%) were for cash with no mortgages involved.
On February 27th the Conference Board reported that the Consumer Confidence Index stood at 130.8, up from 124.3 in January. Lynn Franco, Director of Economic Indicators at the Conference Board, stated “Consumer confidence improved to its highest level since 2000 (Nov. 2000, 132.6) after a modest increase in January. Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead.”
Data from Realtor.com indicates that 13 of the 20 Hottest Housing Markets in February 2018 were in California, ranging from San Francisco as #1 to Los Angeles as #20. These are the markets seeing the quickest sales and most buyer demand online; Santa Barbara did not place on this list. To see the whole article: https://www.realtor.com/news/trends/20-hottest-markets-real-estate-u-s-february-2018/ . Looking at the heated San Francisco market, it is not unusual to see listings generating multiple offers and being bid up much higher than the list price. Thanks to Kim Wiley with Compass in San Francisco for this overbid data. Number 1 of the top 20 overbids in February was a House on Teresita Blvd. which was listed at $1,199,000 and sold for $1,950,000, 62.6% over the list price. The 20th sale on the list was a Condominium on McAllister Street which was listed at $899,000 and sold for $1,215,000, 35.2% over the sales price. To see Kim’s full list of San Francisco overbids check out: www.compass.com/c/kim.wiley/february-2018-top-20-overbids?1521048344927 .
Historically the highest year-to-date February median sales price recorded on the Santa Barbara South Coast was recorded in 2006 at $980,000 until December 2017 came along with a median sales price of $986,000. The median sales price was up in January 2018 to $999,500, much higher than it ever has been. The market now has risen into uncharted territory.
The decline in the frequency of owners deciding to market their homes has played another critical role in pressurizing the many markets; owners are now staying in their homes at a median rate of 10 years, the highest level since the National Association of Realtors started tracking this statistic in 1985. Take for example the available inventory as of March 8th in Goleta where there were only 41 active House/PUD listings and 32 pending sales, which equates to only a 1.3 month supply of properties for Buyers to choose from. Under 3 months of inventory would typically 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. Based on Santa Barbara Multiple Listing Service data and as of March 8th, Carpinteria/Summerland had a 5.2 month supply, Montecito had an 8.8 month supply, Santa Barbara had a 2 month supply and Hope Ranch had only a 2.8 month supply. These inventory statistics indicate that Santa Barbara, Hope Ranch and Goleta markets are still tilting in the Seller’s favor while Carpinteria/Summerland and Montecito are in or are shifting into a Buyer’s market. With a total of 126 House/PUD pending sales and only 279 active listings on the South Coast of Santa Barbara County, there is only a combined 2.2 month supply of House/PUD listings for Buyers to choose from. With a total of 51 Condominium pending sales and only 94 active listings on the South Coast of Santa Barbara County, there is a 1.8 month supply of condominium listings for Buyers to choose from. In the short term it seems apparent that the disaster in Montecito has dampened demand in that segment of the market as there is an 8.8 month supply of active listings for sale in February. The reverse is true in Hope Ranch where there was a 13.6 month supply of active listings in early January, then a 3.6 month supply in February and now there is only a 2.8 month supply of active listings to choose from. It is too soon to know how the Montecito disaster will affect Montecito values in the long term, but it has put pressure on the Hope Ranch market.
The ramifications of the Federal tax cuts and planned increase in government spending remains to be seen. Only time will tell, but available inventory still remains near an all time low. Supply and demand dynamics have and will continue to affect the South Coast of Santa Barbara Real Estate Market.
Feel free to contact me with any real estate related questions.
Stan Tabler, CRS, GRI, ABR, GREEN
Compass California
1002 Anacapa Street
Santa Barbara, CA 93101
805.689.2305
CalBRE Brokers License #00774377 since 1980
Realtor of the Year
Santa Barbara is beautiful but very expensive. It is hard to see how the average family can afford to purchase a place there.
Nick,
I agree with our expensive assessment, but most of the coastal towns in California suffer the same housing woes. Santa Barbara is not the most expensive in the state by far, but property is not inexpensive either. It just matters how much someone wants to live in these desirable areas.
Stan
Hi Stan, can you tell me more about SB no/slow growth policy? How does it relate to building a new home versus major renovations to existing home. Looking to get an idea of the costs and building code obstacles. Also, is the construction industry primarily made of large companies or single proprietorships?
Thank you
Dominick,
Thanks for the questions. There are not many new homes being built, but we have some condominium and planned unit developments infilling the blank spaces in Goleta, all being built by larger national corporations. We do have many high quality building companies in town for building single family homes at $300++/square foot. It is not unusual to have building permits, even for small jobs, to take 6-12 months to go through the permitting process (not fun).
Stan
It is wise to consider if most places in California are within your budget. The cost of living is higher so this could take a toll on you if you are moving from out of state. It seems like a good idea to figure out what you can afford before you begin looking at homes so that you don’t fall in love with something that is out of your price range.
Joy,
I agree, finding a comfortable level for your cost of living is very important. If you move away from Coastal California, the cost of living usually goes way down. Folks just want to live in places like Santa Barbara and pay more to do so.
Stan
I had no idea that the highest number of available listings were in 1992. Was there any particular reason that it was such a buyer’s market back at that time? I speculate that the weather was particularly stable and prices had dropped.
Sam,
In the early 1990’s Southern California was in a recession, probably more so than the rest of the country since most of the local aerospace industries were closing up and laying off employees. We lost a lot of local jobs and many folks decided to leave town in search of new jobs. Hope that offers some explanation of what transpired.
Stan
I never knew that the mortgage process is very challenging for buying luxury homes so it’s good to work with a professional. My grandma is looking to buy luxury real estate for sale in my neighborhood. I’ll be sure to talk to her about working with a professional so everything is done correctly.
You have explained everything regarding real estate selling and buying very nicely. Helpful indeed. Thanks for sharing.
Very informative post Stan! I’m from San Diego but provide home inspection services and it’s always interesting to learning more about the real estate markets across Southern California.