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 2018
Single Family Residence/PUD Market
Median Sales Price = $1,200,000
Lowest Sale Price = $430,000
Highest Sale Price = $10,130,000
Condominium Market
Median Sales Price = $635,000
Lowest Sale Price = $335,000
Highest Sale Price = $1,350,000
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
January 15, 2019
Direct from the County Recorder’s Office, the overall number of property sales on the South Coast of Santa Barbara County was up 10% from 132 in December 2017 to 146 in December 2018, the median sales price was down 18% from $1,230,000 in December 2017 to $1,004,000 in December 2018 and the average sales price was down 3% from $1,472,542 in December 2017 to $1,334,863 in December 2018. In December 2018 there were103 House/PUD sales with a median sales price of $1,200,000 and an average sales price of $1,753,097. In December 2018 there were 43 Condominium sales with a median sales price of $635,000 and an average sales price of $650,837.
In Carpinteria the number of sales was up .8% from 12 in December 2017 to 13 in December 2018. The median sales price was up 17% from $809,750 in December 2017 to $950,000 in December 2018 and the average sales price was up 51% from $1,037,042 in December 2017 to $1,566,846 in December 2018. The lowest priced Carpinteria sale in December 2018 was a Condominium on Franciscan Court @ $509,000 and the highest was a House on Shepard Mesa Road @ $4,360,000.
In Summerland there were 2 sales in both December 2017 and December 2018. The median and average sales prices were down 58% from $2,285,000 in December 2017 to $965,000 in December 2018. The lowest priced Summerland sale in December 2018 was a House on Harding Street @ $880,000 and the highest was a House on Whitney Avenue @ $1,050,000.
In Montecito the number of sales was down 21% from 19 in December 2017 to 15 in December 2018. Sales in Montecito are still dampened by disastrous debris flows of January 2018 and continued evacuation warnings. The median sales price was up 24% from $2,280,000 in December 2017 to $2,819,000 in December 2018 and the average sales price was up 26% from $2,550,316 in December 2017 to $3,222,267 in December 2018. The lowest priced Montecito sale in December 2018 was a House on Sycamore Canyon Road @ $975,000 and the highest was an Estate on Cold Springs Road @ $10,000,000.
In Santa Barbara the number of sales was up 7% from 58 in December 2017 to 62 in December 2018. The median sales price was down 9% from $1,185,000 in December 2017 to $1,077,500 in December 2018 and the average sales price was up 3% from $1,294,284 in December 2017 to $1,334,863 in December 2018. The lowest priced Santa Barbara sale in December 2018 was a Condominium on State Street @ $361,000 (price controlled) and the highest was an bluff-front House on Cliff Drive @ $10,130,000.
There were no sales in Hope Ranch in December 2018 down from 4 in December 2017.
In Goleta the number of sales was up 54% from 37 in December 2017 to 54 in December 2018. The median sales price was down 2% from $859,000 in December 2017 to $841,000 in December 2018 and the average sales price was down 5% from $1,071,703 in December 2017 to $1,021,491 in December 2018. The lowest priced Goleta sale in December 2018 was a Condominium on Dearborn Place @ $335,000 and the highest was a House on San Antonio Creek Road @ $2,725,000.
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. While the appreciation rate along the South Coast has softened, there are still a few areas where multiple offers are commonplace. On the South Coast of Santa Barbara County as of January 7th there were 336 active House/PUD listings (down from 352 in December) and 136 active Condominium listings available for purchase (up from 134 in December). Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 110 (32.7%) of the 336 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, which was a lot of inventory for Buyers to choose from.
In October, November and December 2018 on the South Coast of Santa Barbara there were no bank-owned property sales. As of November 2nd there were no bank-owned listings in escrow and only 2 bank-owned listings available for sale: a Condominium on Palmetto Way for $499,900 (reduced from $549,900) and a House on Cuna Drive for $1,200,000 (reduced from $1,349,000) (these same 2 listings have been available for many months now). During the last few years, the foreclosure activity along the South Coast of Santa Barbara County has diminished dramatically. Check out California’s foreclosure list by Realty Trac: http://www.realtytrac.com/statsandtrends/foreclosuretrends/ca .
As of November 2018 (the latest data available from CoreLogic), the highest recorded County median sales price in California was in San Francisco County @ $1,300,000 (same as in 2017) and the lowest recorded County median sales price was in Siskiyou County @ $197,000 (up 20.5% from 2017). The median sales price in the County of Santa Barbara was $500,000 (down 4.8% from 2017) and the median sales price in the City of Santa Barbara was $1,027,000 (down 5% from 2017). The lowest median sales price recorded in any California city was in Needles in San Bernardino County @ $44,000 (down 26.7% from 2017) and the highest was in Atherton in San Mateo County @ $7,650,000 (up 70.6% from in 2017). You could buy 174 median priced houses in Needles, 15.3 in the County of Santa Barbara or 7.5 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 Needles for $37,999, check https://www.realtor.com/realestateandhomes-detail/409-H-St_Needles_CA_92363_M10506-74837 . If you care to see what you can buy in Atherton for $5,688,000 check https://www.realtor.com/realestateandhomes-detail/62-Fair-Oaks-Ln_Atherton_CA_94027_M18966-73519?view=qvt .
The Federal Reserve (the Fed) last raised the short term lending rate to banks to 2.50% at their December meeting. Looking ahead to 2019, investors are now unsure if the Fed will raise the rates again anytime soon. Chairman Powell reiterated his former statements that the Fed would be patient about future interest rate hikes and one of the board members, Charles Evans, hinted the Fed would stand pat on interest rates until around “mid-year”. Along with the decline in the stock market, the 30-year mortgage interest rate also declined to around 4.45% which is the lowest rate since April and down from 4.94% in November. Mortgage interest rates are still up considerably from 3.99% where they were a year ago, but remain historically low.
Of the 146 sales in December 2018, 76 sold for over $1,000,000 which equates to 52.1% of the total sales, up from 44.4% in November. 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 146 sales in December 2018, 21.2% (31) were cash transactions, up from 18.5% in November.
On December 27th the Conference Board reported that the Consumer Confidence Index stood at 128.1, down from 136.4 in November and 137.9 in October. Lynn Franco, Director of Economic Indicators at the Conference Board, stated: “Expectations regarding job prospects and business conditions weakened, but still suggest that the economy will continue expanding at a solid pace in the short-term.” The highest Consumer Confidence level was last seen in September 2000 when the Index stood at 142.5.
As for the cost of living, Numbeo compiles data for their cost of living index for major cities in the Western Hemisphere. Numbeo’s indices are relative to New York City. Which means that for New York City, each index should be 100(%). If another city has, for example, rent index of 120, it means that on an average in that city rents are 20% more expensive than in New York City. If a city has rent index of 70, that means on an average in that city rents are 30% less expensive than in New York City. The highest City index on the 2018 list was Hamilton in Bermuda @ 145.43, the highest City Index in California was San Francisco @ 97.84, the lowest City Index in California was Bakersfield @ 69.2, the lowest City Index in the United States was Athens, GA, @ 60.55 and the lowest City Index on the list was Puebla in Mexico @ 32.65. Santa Barbara’s City Index came in @ 79.17. This is a very interesting comparison list to check out: https://www.numbeo.com/cost-of-living/region_rankings.jsp?title=2018®ion=019 .
For December 2018, data from Realtor.com indicates that 7 (also 7 in October and November) of the 20 Hottest Housing Markets in the United States were in California, ranging from Chico as #1 to Modesto at #17. It is interesting to note all of California’s Hottest Housing Markets were in the Northern part of the state. As of December 2018 the hottest housing zip code in California was in Albany (San Francisco Bay Area). To review the Realtor.com data, check out: https://www.realtor.com/research/reports/hottest-markets/ .
Historically the highest yearly median sales prices recorded on the Santa Barbara South Coast were recorded in 2006 at $980,000 and 2017 at $985,006. The 2018 median sales price was $985,000. The current median sales price has now been hovering near those historic highs for most of the 2017 and 2018 years, which would indicate a leveling off in market values.
As of January 7th in Goleta there were 43 active House/PUD listings and 15 pending sales, which equates to only a 2.9 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 January 7th, Carpinteria/Summerland had a 3.3 month supply, Montecito had a 9.2 month supply, Santa Barbara had a 4.2 month supply and Hope Ranch had a 9 month supply. These inventory statistics indicate that the Carpinteria/Summerland and Goleta markets are still tilting a bit in the Seller’s favor, the Santa Barbara market is becoming well balanced and the Hope Ranch and Montecito market are tilting more towards a Buyer’s market. With a total of 73 House/PUD pending sales and only 336 active listings on the South Coast of Santa Barbara County, there is only a combined 4.6 month supply of House/PUD listings for Buyers to choose from. With a total of 37 Condominium pending sales and only 136 active listings on the South Coast of Santa Barbara County, there is only a 3.7 month supply 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 pressures on Hope Ranch and the upper price rangers of Santa Barbara and Goleta housing supply still seems evident. 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.
The ramifications of the rising mortgage rates, Federal tax cuts, planned increase in government spending, limits on mortgage interest deductions, the Federal Government’s partial shutdown, the Federal $10,000 limit on State tax deductions and the memories of the fire & 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 $14,190+/- per year. Other tax cuts may offset this limit deduction, but this would be a good time to meet with your CPA or financial advisor for advice on these issues. 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 and Happy 2019 to All!
Stan Tabler, CRS, GRI, ABR, GREEN
Compass
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.