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 January 2018
Single Family Residence/PUD Market
Median Sales Price = $1,204,000
Lowest Sale Price = $620,000
Highest Sale Price = $5,200,000
Median Sales Price = $578,000
Lowest Sale Price = $340,000
Highest Sale Price = $2,489,000
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
February 16, 2018
Direct from the County Recorder’s Office, the overall number of property sales on the South Coast of Santa Barbara County was down 26% from 121 in January 2017 to 89 in January 2018, the median sales price was up 5% from $860,000 in January 2017 to $900,000 in January 2018 and the average sales price was up 10% from $1,248,504 in January 2017 to $1,371,989 in January 2018. In January 2018 there were 62 House/PUD sales with a median sales price of $1,204,000 and an average sales price of $1,659,718. In January 2018 there were 27 Condominium sales with a median sales price of $578,000 and an average sales price of $711,278.
In Carpinteria the number of sales was down 57% from 14 in January 2017 to 6 in January 2018. The median sales price was down 5% from $689,500 in January 2017 to $655,250 in January 2018 and the average sales price was down 11% from $743,571 in January 2017 to $659,417 in January 2018. The lowest priced Carpinteria sale in January 2018 was a Condominium on Carpinteria Avenue for $520,000 and the highest was a PUD on Cambridge Lane for $800,000.
In Summerland the number of sales was down 50% from 2 in January 2017 to 1 in January 2018. The median and average sales prices were up 26% from $975,000 in January 2017 to $1,225,000 in January 2018. There was only one Summerland sale in January 2018 on Shelby Street for $1,225,000.
In Montecito the number of sales was down 31% from 13 in January 2017 to 9 in January 2018. The median sales price was up 33% from $2,250,000 in January 2017 to $3,000,000 in January 2018 and the average sales price was down 9% from $3,344,462 in January 2017 to $3,038,611 in January 2018. The lowest priced Montecito sale in January 2018 was a House on Jameson Lane for $1,220,000 and the highest was a House on El Rancho Road for $5,200,000.
In Santa Barbara the number of sales was down 9% from 58 in January 2017 to 53 in January 2018. The median sales price was up 1% from $837,671 in January 2017 to $845,000 in January 2018 and the average sales price was up 18% from $1,020,500 in January 2017 to $1,202,311 in January 2018. The lowest priced Santa Barbara sale in January 2018 was a Condominium on Por La Mar Circle for $459,000 and the highest was a House on El Cielito Road for $3,500,000.
In Hope Ranch the number of sales was down 50% from 4 in January 2017 to 2 in January 2018. The median sales price was up 55% from $2,737,500 in January 2017 to $4,245,000 in January 2018 and the average sales price was up 64% from $2,581,250 in January 2017 to $4,245,000 in January 2018. The lowest priced Hope Ranch sale in January 2018 was an Estate on Via Esperanza for $3,090,000 and the highest was an Estate on Via Tranquila for $5,400,000.
In Goleta the number of sales was down 40% from 30 in January 2017 to 18 in January 2018. The median sales price was up 16% from $726,500 in January 2017 to $840,750 in January 2018 and the average sales price was up 35% from $715,950 in January 2017 to $964,750 in January 2018. The lowest priced Goleta sale in January 2018 was a Condominium on Armitos Avenue for $340,000 and the highest was a House on Cambridge Drive for $1,875,000.
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. On the South Coast of Santa Barbara County as of February 11th there were only 264 active House/PUD listings (up from 257 in January) and 71 active Condominium listings (no change from January) available for purchase. Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 118 (45%) of the 264 active House/PUD listings are located in Montecito and Hope Ranch (even 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!
On the South Coast of Santa Barbara, in January 2018, there was 1 bank-owned property sale on Sea Ranch Drive for $2,887,500. As of February 11th there was one bank-owned listing in escrow: a house on Las Canoas Road for $1,649,000. There is only one bank-owned listing available: a house on Conejo Road for $1,350,000. Compare our market’s less than 1% 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 . I know that there are a few more high-end Santa Barbara properties working their way through the foreclosure process.
As of November 2017 (the latest data available from CoreLogic) the highest recorded median County sales price in California was in San Mateo County @ $1,200,250 (up 19.1% from 2016) and the lowest recorded median County sales price was in Siskiyou County @ $162,000 (up 9.8% from 2016). The median sales price in the County of Santa Barbara was $472,000 (up 3.6% from 2016) and the median sales price in the City of Santa Barbara was $1,241,000 (up 31.3% from 2016). The lowest median sales price in any California city was in Stratford in Kings County @ $50,000 (no sales in 2016) and the highest was in Newport in Orange County @ $4,900,000 (up 31.1% from 2016). You could buy 98 median priced houses in Stratford, 10.4 in the County of Santa Barbara or 4 in the City of Santa Barbara for the same price as 1 house in Newport.
Jerome Powell has now succeeded Janet Yellen as the new Federal Reserve Chairperson. The Fed raised rates 3 times last year, but they did not raise the rates at their January meeting. At the meeting, the policymakers stated that they expected “further gradual” rate increases will be warranted in 2018 that will hinge upon the pickup in inflation rates. Mortgage rates still are near historic lows, but they will not stay that way for long.
Of the 89 sales in January 2018, 39 were over $1,000,000 which equates to 44% of the total sales, 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 89 January 2018 sales, 28 sales (31%) were for cash with no mortgages involved.
On January 30th the Conference Board reported that the Consumer Confidence Index stood at 125.4, up from 123.1 in December. Lynn Franco, Director of Economic Indicators at the Conference Board, stated “Expectations improved, though consumers were somewhat ambivalent about their income prospects over the coming months, perhaps the result of some uncertainty regarding the impact of the tax plan.”
Data from Realtor.com indicates that 13 of the 20 Hottest Housing Markets in January 2018 were in California, ranging from San Francisco as #1 to Santa Cruz as #18. 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-america-january-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. The number 1 of top 20 January overbids in San Francisco was the sale on Fell Street which was listed at $748,000 and sold for $1,250,000, 67.1% over the list price. The 20th sale on the list was on Margaret Avenue which was listed at $998,888 and sold for $1,300,000, 30.1% over the sales price. For the full list: https://www.compass.com/c/kim.wiley/january-2018-top-20-overbids?ct=t(Newsletter_December_2017)&mc_cid=9809c034a7&mc_eid=bb5629d88.
Historically the highest year-to-date December 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 retreated in January 2018 to $900,000.
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 February 11th in Goleta where there were only 38 active House/PUD listings and 19 pending sales, which equates to only a 2 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 balanced market between Buyers and Sellers and typically over a 6 month supply would be considered a Buyer’s market. Based on Santa Barbara Multiple Listing Service data and as of February 11th, Carpinteria/Summerland had a 5 month supply, Montecito had a 20 month supply, Santa Barbara had a 1.9 month supply and Hope Ranch had an 3.6 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 86 House/PUD pending sales and only 264 active listings on the South Coast of Santa Barbara County, there is only a 3 month supply of House/PUD listings for Buyers to choose from. With a total of 38 Condominium pending sales and only 97 active listings on the South Coast of Santa Barbara County, there is a 2.6 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 market as there was a 7 month supply of active listings for sale in early January and now there is a 20 month supply. The reverse is true in Hope Ranch where there was a 13.6 month supply of active listings in early January and now there is a 3.6 month supply. It is too soon to know how the Montecito disaster will affect values in the sort and long run, but it has put pressure on the Hope Ranch market.
The changes in the income tax laws may also have an effect on California real estate values. 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
1002 Anacapa Street
Santa Barbara, CA 93101
CalBRE Brokers License #00774377 since 1980