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 August 2019
Single Family Residence Market
Median Sales Price = $1,292,500
Lowest Sale Price = $545,000
Highest Sale Price = $13,000,000
Median Sales Price = $675,000
Lowest Sale Price = $401,500
Highest Sale Price = $1,585,000
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
September 19, 2019
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 202 in August 2018 to 176 in August 2019. In August 2019 there were 130 House/PUD sales, down 1% from 2018, with a median sales price of $1,292,500 and an average sales price of $1,205,000. In August 2019 there were 46 Condominium sales, down 36% from 2018, with a median sales price of $675,000 and an average sales price of $721,967. There were a total of 1,326 Year-to-Date sales in 2019 with a median sales price of $1,010,000 and an average sales price of $1,527,036.
In Carpinteria there were a total of 19 sales in August 2019. The median sales price of the 10 House/PUD sales was $912,250 and the average sales price was $1,013,050. In August 2019 the median sales price of the 9 Condominium sales was $599,000 and the average sales price was $590,611. The lowest priced Carpinteria sale in August 2019 was a Condominium on Birch Street @ $401,500 and the highest was a House on Third Street @ $1,565,000.
In Summerland there were a total of 4 sales in August 2019. The median sales price of the 4 House/PUD sales was $1,005,000 and the average sales price was $1,228,750. In August 2019 there were no Condominium sales in Summerland. The lowest priced Summerland sale in August 2019 was a House on Lillie Avenue @ $855,000 and the highest was a PUD on Marguerite Way @ $2,050,000.
In Montecito there were a total of 15 sales in August 2019. The median sales price of the 15 House/PUD sales was $4,200,000 and the average sales price was $4,454,467. In August 2019 there were no Condominium sales in Montecito. The lowest priced Montecito sale in August 2019 was a House on Ashley Road @ $1,100,000 and the highest was an Estate on Hill Road @ $13,000,000.
In Santa Barbara there were a total of 92 sales in August 2019. The median sales price of the 72 House/PUD sales was $1,303,750 and the average sales price was $1,498,972. In August 2019 the median sales price of the 20 Condominium sales was $677,000 and the average sales price was $779,450. The lowest priced Santa Barbara sale in August 2019 was a Condominium on E. Micheltorena Street @ $432,000 and the highest was a House on Campanil Drive @ $8,300,000.
In Hope Ranch there were a total of 2 sales in August 2019. The median and average sales prices of the 2 House sales were $2,575,000. There are no Condominiums in Hope Ranch. The lowest priced Hope Ranch sale in August 2019 was a House on Via Bendita @ $2,550,000 and the highest was a House on Via Vistosa @ $2,600,000.
In Goleta there were a total of 44 sales in August 2019. The median sales price of the 27 House/PUD sales was $1,000,000 and the average sales price was $1,207,556. In August 2019 the median sales price of the 17 Condominium sales was $709,500 and the average sales price was $723,882. The lowest priced Goleta sale in August 2019 was a Condominium on Ponderosa Way @ $541,500 and the highest was a PUD on Goldfield Court @ $2,175,000.
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 and multiple offers are possible, lately they have become few and far between. On the South Coast of Santa Barbara County as of September 1st there were 465 active House/PUD listings (down from 456 in August) and 106 active Condominium listings available for sale (down from 137 in August). Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 194 (42%) of the 465 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!
After no bank-owned sales on the South Coast of Santa Barbara since September 2018, there were 3 in March 2019, 1 in April, 3 in May and zero in both June and July. In August 2019 there was only 1 bank-owned sale; a House on Avenida Gorrion for $1,245,000. As of September 1st there is 1 bank-owned listing available for sale; a House on Painted Cave Road @ $2,495,000 (which has been on the market since March). There are 2 currently bank-owned listings in escrow: a Condominium on De La Vina Street @ $579,500 and a house on Palomino Road @ $1,300,000. During the last few years, the foreclosure activity along the South Coast of Santa Barbara County has diminished dramatically; only 1 of the 143 sales in August 2019 was bank-owned. To check out California’s foreclosure by county, clink on this RealtyTrac link: California Foreclosure Trends by County .
As of July 2019 (the latest data available from CoreLogic), the highest recorded County median sales price in California was in San Francisco County @ $1,350,000 (up 3.8% from 2018) and the lowest recorded County median sales price was in Siskiyou County @ $174,500 (down 6.7% from 2018). The median sales price in the County of Santa Barbara was $584,500 (up 17.4% from 2018) and the median sales price in the City of Santa Barbara was $1,164,000 (up 3.9% from 2018). The lowest median sales price recorded in any California city was in Boron in Kern County @ $40,000 (down 31.6% from 2018) and the highest was in Stanford in San Clara County @ $3,600,000 (no sales in July 2018). You could buy 90 median priced houses in Boron, 6.2 in the County of Santa Barbara or 3 in the City of Santa Barbara for the same price as 1 in Stanford. If you care to see a house you can buy in the Boron area for $45,000 check out https://www.realtor.com/realestateandhomes-detail/27274-Anderson-St_Boron_CA_93516_M18095-56048?view=qv . If you care to see a house you can buy in Stanford for $3,650,000 check out https://www.realtor.com/realestateandhomes-detail/645-Cabrillo-Ave_Stanford_CA_94305_M29778-97027?view=qv .
The Federal Reserve (the Fed) raised the short term rate four times last year; the last raise was to 2.5% in December 2018. As signs of a cooling American economy, world economy, trade tensions and possibly Presidential influence, at their July 30-31 meeting the Fed lowered their overnight interest rate by .25% to 2.25% and at their September 17-18th meeting they again reduced the rate to 1.75% to 2%. That is the first time the Fed has cut the interest rates since 2008 at the beginning of the Great Recession. At the September meeting, the Fed seemed to project there will be no more rate reductions in the “near future”. The 30-year fixed mortgage interest rates are now hovering in the 3.65-4.0% range, far below their recent November 2018 highs of 4.94%. According to the Mortgage Bankers Association, refinance applications are up 116% compared to a year ago. To put this all in historical perspective, the lowest 30-year mortgage interest rate since 1970 was recorded in 2012 @ 3.31%, and the highest was recorded in 1981 @ 18.63%.
Of the 195 sales in August 2019 there were 92 sales over $1,000,000 which equates to 52% of the total sales, up from 30% in July, 27% in June and 26% in May. 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 averages 20%; in August 2019 30% of the real estate sales were all cash. See the attached for the total list of the 176 properties sold on the South Coast of Santa Barbara County in August 2019.
On August 27th the Conference Board reported that the Consumer Confidence Index stood at 135.1, down from 135.8 in July. The highest recent Index levels recorded were 136.4 in November 2018 and 137.9 in October 2018. Lynn Franco, the Director of Economic Indicators at the Conference Board, stated: “Consumer confidence was relatively unchanged in August, following July’s increase. Expectations cooled moderately, but overall remain strong. While other parts of the economy may show some weakening, consumers have remained confident and willing to spend. However, if the recent escalation in trade and tariff tensions persists, it could potentially dampen consumers’ optimism regarding the short-term economic outlook.” Historically the highest Consumer Confidence Index level was recorded in September 2000 when the Index stood at 142.5.
As for the cost of living, Expatistan has compiled data from 90 major metropolitan areas in North America. Expatistan’s list indicates Palo Alto, CA (beating out New York City) as the most expensive with a score of 259 and Greensboro, NC as the least expensive with a score of 126. Of the top 20 most expensive areas, 8 were in California: #1 Palo Alto @ 259, #2 Mountain View @ 255, #4 San Francisco @ 239, #5 San Jose @ 212, #7 Oakland @ 209, #10 Los Angeles @ 202, #17 Sacramento @ 185 and #19 San Diego @ 184. Santa Barbara is not on the list since it is not rated as a major metropolitan area. This is a very interesting list to check out: https://www.expatistan.com/cost-of-living/index/north-america .
As per the August 15, 2019 article by Nicolas Bedo at Realtor.com®, his Luxury Home Index analyzes 82 luxury markets through April 2019. Of the top 20 most expensive Luxury Markets in the nation, California is home to 10 of those Markets. Nicolas Bedo writes “Coastal California luxury markets are gaining momentum. Santa Barbara saw price declines at the start of 2019, but is now growing by 8.4 percent, reaching an entry-level price point of $2.6 million. Furthermore, million dollar sales in Santa Barbara are up 17.3 percent year-over-year.” Check out his latest article: https://www.realtor.com/research/tag/luxury-homes/
Historically the highest Year-to-Date median sales price recorded on the Santa Barbara South Coast was recorded in 2007 at $1,031,500. The 2019 Year-to-Date median sales price was $1,020,000. The current median sales price has now been hovering just below or just above the historic high for most of 2017, 2018 and now more than halfway through 2019. This seems to be an indication of a leveling off in market values along the South Coast of Santa Barbara.
Based on the Santa Barbara Multiple Listing Service, as of September 1st, in the City of Santa Barbara there were 162 active House/PUD listings and 53 pending sales, which equates to only a 3.1 month supply of listings for Buyers to choose from. Generally under 3 months of inventory would be considered a Seller’s market where demand is high and inventory is low; 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 well-balanced market between Buyers and Sellers and typically over a 6 or 7 month supply is considered to be a Buyer’s market where inventory is high, so 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 September 1st, Carpinteria/Summerland had a 3.8 month supply, Montecito had a 8.3 month supply, Goleta had a 2 month supply and Hope Ranch had an 7.3 month supply. These inventory statistics indicate that Goleta is in a Seller’s market, Carpinteria and Santa Barbara are close to being in a Seller’s market and Montecito and Hope Ranch both are in a Buyer’s market. With a total of 123 House/PUD pending sales and only 465 active listings on the South Coast of Santa Barbara County, there is only a 3.8 (up from 3.1 in August) month supply of House/PUD listings to choose from. With a total of 56 Condominium pending sales and only 106 active listings on the South Coast of Santa Barbara County, there is a 1.9 month supply (down from 3.3 in August) 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 the pressures on Hope Ranch and the upper price rangers of Santa Barbara and Goleta housing supply have been very evident for over a year now. 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 at 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, recent stock market corrections, trade tensions between China, Canada, Mexico 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 $15,000+/- per year. Only time will tell how the new tax code will play out and how they will affect Santa Barbara real estate values in the long run. Supply and demand dynamics have and will still 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