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 October 2018
Single Family Residence/PUD Market
Median Sales Price = $1,199,000
Lowest Sale Price = $495,000
Highest Sale Price = $13,000,000
Condominium Market
Median Sales Price = $765,000
Lowest Sale Price = $317,500
Highest Sale Price = $2,500,000
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
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
November 15, 2018
Direct from the County Recorder’s Office, the overall number of property sales on the South Coast of Santa Barbara County was up 14.7% from 142 in October 2017 to 164 in October 2018, the median sales price was down 6% from $1,100,000 in October 2017 to $1,038,456 in October 2018 and the average sales price was down 14% from $1,759,913 in October 2017 to $1,517,896 in October 2018. In October 2018 there were 96 House/PUD sales with a median sales price of $1,046,810 and an average sales price of $1,202,338. In October 2018 there were 37 Condominium sales with a median sales price of $761,500 and an average sales price of $758,716.
In Carpinteria there were 14 sales in October 2017 and in October 2018. The median sales price was down 2% from $824,250 in October 2017 to $805,000 in October 2018 and the average sales price was down 64% from $3,027,357 in October 2017 to $1,085,199 in October 2018. The lowest priced Carpinteria sale in October 2018 was a Condominium on Hickory Street @ $410,000 and the highest was a House on Serena Avenue @ $2,437,500.
In Summerland the number of sales was up 50% from 2 in October 2017 to 3 in October 2018. The median sales price was up 26% from $1,173,500 in October 2017 to $1,475,000 in October 2018 and the average sales price was up 16% from $1,173,500 in October 2017 to $1,363,333 in October 2018. The lowest Summerland sale in October 2018 was a Condominium on Foothill Road @ $765,000 and the highest was an oceanfront Condominium on Lookout Park Road for $1,850,000.
In Montecito the number of sales was up 62.5% from 16 in October 2017 to 26 in October 2018. The median sales price was down 8% from $2,415,000 in October 2017 to $2,212,500 in October 2018 and the average sales price was up 19% from $2,630,500 in October 2017 to $3,125,404 in October 2018. The lowest priced Montecito sale in October 2018 was a Condominium on San Ysidro Road @ $700,000 and the highest was an Estate on Cima Del Mundo Road @ $13,000,000.
In Santa Barbara the number of sales was down 4.3% from 70 in October 2017 to 67 in October 2018. The median sales price was down 9% from $1,118,500 in October 2017 to $1,011,962 in October 2018 and the average sales price was up 6% from $1,218,086 in October 2017 to $1,296,104 in October 2018. The lowest priced Santa Barbara sale in October 2018 was a Condominium on State Street @ $317,500 (price controlled) and the highest was an ocean front house on Cliff Drive @ $7,100,000.
In Hope Ranch the number of sales was down by 40% from 5 in October 2017 to 3 in October 2018. The median sales price was down 46% from $7,000,000 in October 2017 to $3,802,500 in October 2018 and the average sales price was down 48% from $8,452,500 in October 2017 to $4,375,833 in October 2018. The lowest priced Hope Ranch sale in October 2018 was a House on Via Huerto @ $2,225,000 and the highest was an Estate on Creciente Drive @ $7,100,000.
In Goleta the number of sales was up 41.7% from 36 in October 2017 to 51 in October 2018. The median sales price was up 3% from $865,500 in October 2017 to $895,000 in October 2018 and the average sales price was down 8% from $1,036,694 in October 2017 to $949,514 in October 2018. The lowest priced Goleta sale in October 2018 was a Condominium on Linfield Place @ $420,000 and the highest was a House on Vintage Ranch Lane @ $1,962,500.
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. While the appreciation rate along the South Coast seems to have softened in general, there are still some areas where multiple offers are commonplace. On the South Coast of Santa Barbara County as of November 5th there were 409 active House/PUD listings (down from 427 in October) and 141 active Condominium listings available for purchase (up from 133 in October). Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 120 (29.3%) of the 409 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; now that was a Buyer’s market!
In October 2018 on the South Coast of Santa Barbara there were no bank-owned property sales, down from 3 in September. As of November 11th there were no bank-owned listings in escrow and 2 bank-owned listings available for sale: a Condominium on Palmetto Way for $549,900 and a House on Cuna Drive for $1,349,000 (these same 2 listings have been available for months now). During the last few years, the foreclosure activity along the South Coast of Santa Barbara Country has diminished dramatically. Check out California’s foreclosure list by Realty Trac: http://www.realtytrac.com/statsandtrends/foreclosuretrends/ca .
As of September 2018 (the latest data available from CoreLogic) the highest recorded County median sales price in California was in San Mateo County @ $1,301,000 (up 13.1% from 2017) and the lowest recorded County median sales price was in Siskiyou County @ $177,000 (down 1.7% from 2017). The median sales price in the County of Santa Barbara was $544,500 (up 3.7% from 2017) and the median sales price in the City of Santa Barbara was $1,170,000 (up 15% from 2017). The lowest median sales price in any California city was in Newberry Springs in San Bernardino County @ $29,250 (down 26.9% from 2017) and the highest was in Atherton in San Mateo County @ $7,940,000 (up 55.7% from in 2017). You could buy 217.5 median priced houses in Newberry Springs, 14.6 in the County of Santa Barbara or 6.8 in the City of Santa Barbara for the same price as 1 house in Atherton. If you dare to see what you can buy near Newberry Springs for $35,000 (check out the backyard pictures), check https://www.realtor.com/realestateandhomes-detail/1428-Mesa-Dr_Barstow_CA_92311_M13805-56753?view=qv . If you care to see what you can buy in Atherton for $7,580,000 check out https://www.zillow.com/homedetails/95-Tallwood-Ct-Atherton-CA-94027/15599149_zpid/ .
The Federal Reserve (the Fed) last raised the short term lending rate to banks to 2.25% at their September 26th meeting and at their November 8th meeting they again held interest rates steady. Looking ahead, investors see around an 80% chance of the Fed raising the rate by a quarter-point at their December meeting. Strong retail sales numbers and low unemployment rolls are underscoring the Fed’s optimism for the U.S. economy. The 30-year mortgage rate is still hovering around 5%, which is still very low in historical terms.
Of the 165 sales in October 2018, 87 sold for over $1,000,000 which equates to 53% of the total sales, up from 45.6% in September. 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 165 sales in October 2018, 32.3% (53) were cash transactions, up from 21% in September.
On October 30th the Conference Board reported that the Consumer Confidence Index stood at 137.9, up from 135.3 in September. Lynn Franco, Director of Economic Indicators at the Conference Board, stated: “Consumer confidence increased in October, following a modest gain in September, and remains at levels last seen in the fall of 2000 (September 2000, 142.5).”
For October 2018, data from Realtor.com indicates that 7 (up from 5 in September) of the 20 Hottest Housing Markets in the United States were in California, ranging from San Francisco as #7 to Stockton-Lodi at #19. As of October 2018 the hottest housing zip code in California was in Berkeley. To review the Realtor.com data, check out: https://www.realtor.com/research/reports/hottest-markets/ . Looking at the super-heated Seller’s market in San Francisco, it is not unusual to see listings generating multiple offers and being bid up much higher than the asking price; thanks to Kim Wiley with our San Francisco Compass office for the following overbid data. Number 1 of the top 20 San Francisco overbids in October was a House on Park Hill Avenue which was listed at $1,599,999 and sold for $2,620,000, 63.75% over the list price. The 20th highest overbid on the list was a house on Cayuga Avenue which was listed at $895,000 and sold for $1,260,000, 40.78% over the list price. To see Kim’s list of San Francisco overbids check out https://www.compass.com/c/kim.wiley/august-2018-top-20-overbids?1536773003235 . As a Santa Barbara comparison, a house on Crestline Drive was listed at $1,699,000 and sold for $1,825,000, “just” 7.42% over the list price.
Historically the highest year-to-date October median sales price recorded on the Santa Barbara South Coast was recorded in 2006 at $980,000. The year-to-date median sales price for October 2018 was $985,000, up from $980,000 in September. The current median sales price has now been hovering near those historic highs for most of the 2017 and 2018 years.
As of November 5th in Goleta there were 64 active House/PUD listings and 28 pending sales, which equates to only a 2.3 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 November 5th, Carpinteria/Summerland had a 5.2 month supply, Montecito had a 9.1 month supply, Santa Barbara had a 4 month supply and Hope Ranch had a 6.7 month supply. These inventory statistics indicate that the Goleta and Santa Barbara markets are still tilting in the Seller’s favor, while the Carpinteria/Summerland, Hope Ranch and Montecito market are tilting more towards a Buyer’s market. With a total of 95 House/PUD pending sales and only 409 active listings on the South Coast of Santa Barbara County, there is only a combined 4.3 month supply (up from 3.8 in October) of House/PUD listings for Buyers to choose from. With a total of 38 Condominium pending sales and only 141 active listings on the South Coast of Santa Barbara County, there is only a 3.7 month supply (up from 2.9 in October) 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 long term, but pressures on Hope Ranch and the upper price rangers of Santa Barbara and Goleta housing supply seems evident. Buyers do seem to be moving more cautiously than they did just a few months ago and some are taking their time assessing all the listing options along the South Coast of Santa Barbara County.
The ramifications of the gradually rising mortgage rates, Federal tax cuts, planned increase in government spending, limits on mortgage interest deductions and the Federal $10,000 limit on State tax deductions are now 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 $14,025/year. Other tax cuts may offset this limit deduction, but it would be a good time to meet with your CPA or financial advisor for advice on your own tax ramifications. Only time will tell how these new tax rules will play out. 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
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.
Hi Stan- I’m considering purchasing a home in Santa Barbara. What neighborhoods offer all of the following: 1) ocean view, 2) walkable to ocean or restaurants, 3) safe and relatively tourist free? Thanks!
I agree with some of these comments, I consider best to examine the budget before looking at homes so you don’t fall in love with something that is out of said budget.
Thank you for the information, very good post.
Very useful advice. Thanks for sharing
Thanks for the tips on buying and selling real estate, I’d imagine they are applicable to most markets. I agree that one of the first things you should do is determine your budget and find out what you can afford. You wouldn’t want to get your heart set on a home that you can’t afford.
There are a lot of things to take into consideration when buying family housing. As the article points out, one thing you’ll want to look into is the size. After all, you will want to make sure that the home you buy is big enough to fit your whole family.
I like that you suggested having a neighborhood that you want to live in first. I will share this with my sister since I know that she wanted to be in a neighborhood which has a gymnasium with complete equipment. She has always been a fitness buff ever since we were in high school since she is an athlete back then that is why it would help her with this tip.