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 December 2020
Single Family Residence Market
Median Sales Price = $1,563,000
Lowest Sale Price = $632,000
Highest Sale Price = $32,250,000
Median Sales Price = $788,500
Lowest Sale Price = $470,000
Highest Sale Price = $3,125,000
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
January 12, 2021
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 up 31% from 176 in December 2019 to 231 in December 2020. In December 2020 there were 143 House/PUD sales, up 15% from 2019, with a median sales price of $1,563,000 and an average sales price of $2,603,343. In December 2020 there were 88 Condominium sales, up 69% from 2019, with a median sales price of $788,500 and an average sales price of $916,432. In a combined total, there were 2,118 residential sales from January through December 2020 (up 9% from 2019), with a median sales price of $1,200,000 (up 17% from 2019) and average sales price of $1,955,876 (up 25% from 2019).
In Carpinteria there were a total of 25 sales in December 2020, up from 15 in November. In December 2020 the median price of the 19 House/PUD sales was $1,445,000 and the average price was $2,924,000. In December 2020 the median price of the 6 Condominium sales was $849,000 and the average price was $866,974. The lowest priced Carpinteria sale in December 2020 was a Condominium on Sawyer Avenue @ $564,500 and the highest was an oceanfront House on Padaro Lane @ $11,000,000.
In Summerland there were a total of 3 sales in December 2020, down from 7 in November. In December 2020 the median price of the 3 House/PUD sales was $2,152,000 and the average price was $2,123,333. In December 2020 there were no Condominium sales in Summerland. The lowest priced Carpinteria sale in December 2020 was a House on Golden Gate Avenue @ $1,743,000 and the highest was an House on Caspia Lane @ $2,575,000.
In Montecito there were a total of 42 sales in December 2020, up from 41 in November. In December 2020 the median price of the 35 House/PUD sales was $3,450,000 and the average price was $5,369,743. In December 2020 the median price of the 7 Condominium sales was $1,500,000 and the average price was $1,684,000. The lowest priced Montecito sale in December 2020 was a Condominium on Coast Village Road @ $841,000 and the highest was an Estate on Sycamore Canyon Road @ $32,250,000.
In Santa Barbara there were a total of 102 sales in December 2020, up from 91 in November. In December 2020 the median price of the 67 House/PUD sales was $1,415,000 and the average price was $1,698,007. In December 2020 the median price of the 35 Condominium sales was $740,000 and the average price was $938,929. The lowest priced Santa Barbara sale in December 2020 was a Condominium on Highland Drive @ $495,000 and the highest was an oceanfront House on Shoreline Drive @ $4,995,000.
In Hope Ranch there were a total of 3 sales in December 2020, up from 1 in November. In December 2020 the median price of the 3 House/PUD sales was $2,767,500 and the average price was $3,805,833. There are no Condominiums in Hope Ranch. The lowest priced Hope Ranch sale in December 2020 was a House on Via Huerto @ $2,650,000 and the highest was an Estate on Via Abrigada @ $6,000,000.
In Goleta there were a total of 56 sales in December 2020, up from 49 in November. In December 2020 the median price of the 29 House/PUD sales was $1,083,000 and the average price was $1,215,138. In December 2020 the median price of the 27 Condominium sales was $797,000 and the average price was $723,074. The lowest priced Goleta sale in December 2020 was a Condominium on Dearborn Place @ $470,000 and the highest was a House on Boulder Ridge Road @ $2,765,000.
The COVID-19 pandemic has not only affected our daily lives, but also how everyone buys and sells real estate. Open houses and Broker Caravans are not allowed and strict safety protocols are in place for any in-person by appointment only showings of listings. Due to virus concerns and stay-at-home orders, many Sellers have completely cancelled their listings for a time and this only exacerbated the lack of housing inventory on the market. Although unemployment rates remain high, historically low mortgage interest rates and the pent-up Buyer demand for housing is driving values of real estate upward on the South Coast. It would seem that one of the unanticipated side effects of COVID-19 is that Buyers are fleeing from highly populated areas to more lightly populated areas, such as along the South Coast. We have been tracking where the Buyers are coming from and at least 43% are coming not only from out of the County, but also many from out of State and a few from out of the Country.
A limited supply of available properties along the South Coast of Santa Barbara County is keeping values higher than one might expect, even taking into account the effects of COVID-19, as compared to many inland areas of California and most areas of the United States. Along the South Coast of Santa Barbara County as of January 1st there were 135 active House/PUD listings (down from 165 in December and 199 in November) and 24 active Condominium listings available (down from 44 in December and 63 in November). Historically there has been much more inventory available in the higher price ranges than in the lower ranges; as of January 1st 44% of the 135 active House/PUD listings were located in the higher valued Montecito and Hope Ranch areas. Compare these current low totals to the inventory levels from 2007 to 2011 when the total number of active listings ranged between 734 and 1,026. Historically the highest number of active listings along the South Coast was recorded in June of 1992 when there were an astounding 1,297 active listings available.
In 2020 there were only 2 bank-owned sales along the South Coast of Santa Barbara County. As of January 1st there were no bank owned listings for sale on the South Coast of Santa Barbara County. There are 2 bank-owned pending sales in escrow: an estate on Cresta Avenue @ $3,050,000 and a house on Las Positas Place @ $979,999. There have been very few distress sales due to home equity rising quickly allowing Owners to “bail out” their financially distressed properties. To check out California’s foreclosure by county, visit this RealtyTrac link: California Foreclosure Trends by County .
As of November 2020 (the latest monthly data available from CoreLogic), the highest recorded County median sales price in California was in San Francisco County @ $1,350,000 (up 2.3% from 2019) and the lowest recorded County median sales price was in Siskiyou County @ $218,000 (up 11.8% from 2019). The median sales price in the County of Santa Barbara was $780,000 (up 34.5% from 2019) while the median sales price in the City of Santa Barbara was $1,550,000 (up 26.5% from 2019). Other than residential fire-lot sales, the lowest median sales price recorded in any California city was in Trona in San Bernardino County @ $50,000 (no sales in November 2019) and the highest was in Atherton in San Mateo County @ $4,625,000 (down 33.9% from November 2019). You could buy 92.5 median priced Houses in Trona, 5.9 in the County of Santa Barbara or 3 in the City of Santa Barbara for the same price as 1 House in Atherton. If you care to see a cute House you can buy in Trona for a mere $40,000, check out https://www.realtor.com/realestateandhomes-detail/13346-Verbena-St_Trona_CA_93562_M25711-69713 . If you care to see an Estate you can buy in Atherton for $4,995,000, check out https://www.realtor.com/realestateandhomes-detail/80-Amador-Ave_Atherton_CA_94027_M11525-58551 .
The Federal Reserve (the Fed) raised the overnight rate four times in 2018 with the last raise to 2.5% in December 2018 and then in 2019 the Fed lowered the overnight interest rate numerous times, thereby reversing all of 2018’s rate increases. During the Fed’s December 16, 2020 meeting, the Federal Open Markets Committee estimated that the US economy will grow 4.2% in 2021 and the unemployment rate will fall to 5%, down from current levels but above where it was going into the COVID-19 crisis. Much of this progress, though, will depend upon how quickly vaccines are administered to the public and whether they have a meaningful effect on the spread of the virus. As of January 1st you could get a $510,000 30-year fixed rate loan at 2.75%, up a bit from previous months. Historically the lowest 30-year mortgage interest rate since 1970 was recorded in 2012 @ 3.31%, but a new average low @ 2.71% was set in November 2020. The highest mortgage rate was recorded in 1981 @ 18.63%. If you were able to obtain a $510,000 mortgage in 1981, your payment would have been $7,949/month; today it would be $2,082/month. The Fed’s policies have helped drive mortgage interest rates into the high 2% range while at the same time people are spending more time at home and now realize they can use more space, especially to set up a space to be used as an office.
Of the 231 sales in December 2020 there were 143 over $1,000,000 which equates to 62% of the total sales. 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 is 20%; on the South Coast in December 2020, 29% were cash sales, up from 23% in November. See the attached list of the 231 properties sold on the South Coast of Santa Barbara County in December 2020 and/or contact me for information on specific sales.
On December 22nd the Conference Board reported that the Consumer Confidence Index stood at 88.6 down from 92.9 in November. In recent years the highest recent Index level recorded was 137.9 in October 2018 and it was recently as high as 132.6 in February 2020, prior to the COVID-19 pandemic. Historically the highest Consumer Confidence Index level was recorded in September 2000 when the Index stood at 142.5. “Consumers’ assessment of current conditions deteriorated sharply in December, as the resurgence of COVID-19 remains a drag on confidence,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “As a result, consumers’ vacation intentions, which had notably improved in October, have retreated. On the flip side, as consumers continue to hunker down at home, intentions to purchase appliances have risen. Overall, it appears that growth has weakened further in Q4, and consumers do not foresee the economy gaining any significant momentum in early 2021.” To review the full report: https://conference-board.org/data/consumerconfidence.cfm .
As for the cost of living as of January 2021, Expatistan compiled an index of 197 major metropolitan areas worldwide. Expatistan’s list indicates New York, NY @ #4 is the most expensive area in the USA with a Price Index score of 227 and the least expensive are # 113 San Juan, PR @ 116 and #112 Memphis, TN @ 117. Of the top 25 most expensive areas worldwide, 4 are in California: #7 San Francisco @ 221, #11 Oakland @ 202, #20 Los Angeles @ 188 and #22 San Jose @ 184. The most expensive area to live in the world is #1 Hamilton (Bermuda) @ 267 and the least expensive is #197 Hyderabad (India) @ 50. Santa Barbara is not on the list as Expatistan does not rate it as a major metropolitan area. This is an interesting list to check out if you care to compare the cost of living in cities around the world: https://www.expatistan.com/cost-of-living/index .
As of January 7th, Sabrina Speianu, a Senior Research Analyst at realtor.com wrote about December’s national property listing statistics:
“Nationally, the inventory of homes for sale in December decreased by 39.6% over the past year, a slightly higher rate of decline compared to the 39.2% drop in November. This amounted to 449,000 fewer homes for sale compared to December of last year, and a new low of less than 700,000 active listings for the first time in our records. However, seller activity saw some improvement in December, when sellers listed new homes for sale at a rate almost the same as the previous year. New listings were only down 0.8% year-over-year nationally, an improvement over a drop of 8.7% in November. Declining total for-sale inventory when sellers are listing homes roughly on pace with a year ago suggests that buyers are still very active in the housing market, perhaps looking to lock-in record-low mortgage rates.” To read her full article, check out https://www.realtor.com/research/december-2020-data/
Historically the highest Year-to-Date median sale price recorded on the Santa Barbara South Coast was recorded in 2007 at $1,031,500. In December 2020 the Year-to-Date median sales price was $1,200,000, the same as in November, up from $1,195,000 in October 2020, up from $1,176,000 in September and $1,150,000 in August. The median sale price had been hovering near that historic high for most of 2017, 2018, 2019 but now is setting new records as it is up 16% from the historic high. The December 2020 average sale price was $1,955,876, which is 9% above the highest historical average sale price recorded in 2007 at $1,787,898.
Based on the Santa Barbara Multiple Listing Service, as of January 1st, in the City of Santa Barbara there were 43 active House/PUD listings and 52 pending sales, which equates to a mere .83 month supply of listings for Buyers to choose from. Generally up to 3 months of inventory would be considered a Seller’s market where demand is high and inventory is scarce; lower than 2 months of inventory points to a feverish Seller’s market. Historically a 4 to 5 month supply of available inventory would indicate a fairly well-balanced market between Buyers and Sellers. Typically a 6+ month supply is considered to be a Buyer’s market where inventory is plentiful; 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 January 1st, Carpinteria/Summerland had a 1.7 month supply, Montecito had a 3.3 month supply, Goleta had a .56 month supply and Hope Ranch had a 1 month supply. These inventory statistics indicate that Santa Barbara, Hope Ranch and Goleta are in a very feverish Seller’s market with a month or less of inventory. Carpinteria/Summerland are in a feverish Seller’s market and Montecito is nearing a fairly balanced market. These supply levels are all extremely low for all of the areas, but it is interesting to note just how low the supplies are in Montecito with a 3.3 month supply (same as in December 2019) and Hope Ranch with only a 1 month supply (down from 5.8 in December 2019). With a total of 121 House/PUD pending sales and only 135 active listings on the South Coast of Santa Barbara County, there is only a .9 month supply of House/PUD listings from which to choose. With a total of 38 Condominium pending sales and only 24 active listings on the South Coast of Santa Barbara County, there is only a .63 month supply of Condominium listings from which to choose.
The ramifications of the concerns about COVID-19 and how it has and will affect our world, government spending in response to COVID-19, home insurance availability and rising premiums, trade tensions, political tensions, the Federal $10,000 limit on State tax deductions and the memories of the fire damage and debris flows in Montecito are concerns to many Sellers and Buyers along the South Coast of Santa Barbara County. That being said, pent-up demand for homes along the South Coast (from national and international Buyers), low interest rates, and low inventory have boosted real estate values along the South Coast of Santa Barbara County. COVID-19 has actually increased real estate values as Buyers appear to be flocking to the “safe haven” of the Santa Barbara area. The current lack of available inventory in all areas along the South Coast is driving values upward. As always, 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
801 Chapala Street
Santa Barbara, CA 93101
CalBRE Brokers License #00774377 since 1980