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 April 2022
Single Family Residence Market
Median Sales Price = $2,425,000
Lowest Sale Price = $700,000
Highest Sale Price = $16,900,000
Median Sales Price = $895,500
Lowest Sale Price = $585,000
Highest Sale Price = $4,975,000
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
May 12, 2022
Direct from the County Recorder’s Office by way of Fidelity National Title, the total number of monthly residential sales on the South Coast of Santa Barbara County was down 28% from 219 in April 2021 to 136 in April 2022. In April 2022 there were 98 House/PUD (Planned Unit Development) sales (down 36% from 2021) with a median sales price of $2,425,000 (up 18% from 2021) and an average sales price of $3,700,966 (up 18% from 2021). In April 2022 there were 38 Condominium sales, (down 42% from 2021) with a median sales price of $995,000 (up 5% from 2021) and an average sales price of $1,202,237 (up 8% from 2021). Year to date, there were a total of 545 residential sales in 2022 (down 28% from 2021), with a median sales price of $1,800,000 (up 20% from 2021) and an average sales price of $2,890,403 (up 15% from 2021).
In Carpinteria, there were a total of 11 sales in April 2022, down from 14 in March. In April 2022 the median price of the 5 House/PUD sales was $1,500,000 and the average price was $3,177,500. In April 2022 the median price of the 6 Condominium sales was $807,500 and the average price was $768,833. The lowest-priced Carpinteria sale in April 2022 was a Condominium on Via Real @ $600,000 and the highest was a House on Shepard Mesa Road @ $9,150,000.
In Summerland, there were a total of 3 sales in April 2022, up from 1 in March. In April 2022 the median and average price of the 2 House/PUD sales was $1,897,500. In April 2022 the sale price of the 1 Condominium was $1,075,000. The lowest-priced Summerland sale in April 2022 was a Condominium on Banner Avenue @ $1,075,000 and the highest was a House on Banner Avenue @ $1,950,000.
In Montecito, there were a total of 24 sales in April 2022, down from 31 in March. In April 2022 the median price of the 21 House/PUD sales was $5,325,000 and the average price was $6,433,036. In April 2022 the median price of the 3 Condominium sales was $2,200,000 and the average price was $2,862,000. The lowest-priced Montecito sale in April 2022 was a Condominium on North Jameson @ $1,411,000 and the highest was an Estate on Riven Rock Road @ $14,500,000.
In Santa Barbara, there were a total of 59 sales in April 2022, down from 79 in March. In April 2022 the median price of the 44 House/PUD sales was $2,100,000 and the average price was $2,459,461. In April 2022 the median price of the 15 Condominium sales was $900,000 and the average price was $1,257,600. The lowest-priced Santa Barbara sale in April 2022 was a House on Castillo Street @ $700,000 and the highest was a House on Campanil Drive @ $7,000,000.
In Hope Ranch, there were a total of 5 sales in April 2022, up from 2 in March. In April 2022 the median price of the 5 House sales was $12,000,000 and the average price was $11,613,090. There are no Condominiums or PUDs in Hope Ranch. The lowest-priced Hope Ranch sale in April 2022 was an Estate on Sonriente Road @ $4,756,000 and the highest was an Estate on Via Alegre @ $16,900,000.
In Goleta, there were a total of 34 sales in April 2022, down from 46 in March. In April 2022 the median price of the 21 House/PUD sales was $1,950,000 and the average price was $1,982,701. In April 2022 the median price of the 13 Condominium sales was $950,000 and the average price was $965,385. The lowest-priced Goleta sale in April 2022 was a Condominium on Cathedral Oaks Road @ $585,000 and the highest was a PUD on Kestrel Lane @ $3,900,000.
The COVID-19 pandemic has not only affected our daily lives but also how everyone buys and sells real estate. Open houses and Broker Tours are once again allowed with optional mask-wearing. Many Sellers who had avoided listing their homes due to COVID-19 concerns have now moved forward and listed their properties for sale as sale prices have surged, but inventory still remains very low. Still, historically low mortgage interest rates and the glut of Buyers are driving real estate values upward along the South Coast of Santa Barbara County.
The limited supply of available properties along the South Coast of Santa Barbara County keeps values higher compared to other areas of California and the United States. Along the South Coast of Santa Barbara County as of April 1st, there were 71 active House/PUD listings (down from 75 in March) and 7 active Condominium listings available (down from 9 in March). Historically there has been more inventory available in the higher price ranges than in the lower ranges; as of April 1st, 30% of the 71 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 fluctuated 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 for Buyers to choose from.
In all of 2021, there were only 2 bank-owned sales along the South Coast of Santa Barbara County and as of May 1st there was only 1 bank-owned listing for sale on the South Coast of Santa Barbara County; a long-delayed foreclosure at 374 Cinderella Lane @ $1,155,000. There have been very few distress sales due to homeowner equity rising so quickly which allows them to “bailout” their financially distressed properties, pay off their mortgage and avoid foreclosure. To check out California’s foreclosure list by County, check out this link: California Foreclosure Trends by County .
As of March 2022 (the latest monthly data available from CoreLogic), the highest recorded median sales price in any California county was in San Mateo County @ $1,555,000 (up 9.5% from 2021) and the lowest recorded county median sales price was in Siskiyou County @ $279,500 (up 21.8% from 2021). The median sales price in Santa Barbara County was $812,570 (up 22.2% from 2021) while the median sales price in the City of Santa Barbara was $2,100,000 (up 31.3% from 2021). The lowest residential median sales price in any California city was recorded in Trona in San Bernardino County @ $65,000 (down 18.8% from 2021) and the highest was in Atherton in San Mateo County @ $7,150,000 (down 3.2% from 2021). You could buy 110 median-priced Houses in Trona, 8.8 in Santa Barbara County, or 3.4 in the City of Santa Barbara for the same price as 1 House in Atherton. If you care to see a House you can buy in Trona for only $57,500, check out https://www.realtor.com/realestateandhomes-detail/12346-F-St_Trona_CA_93562_M25415-80555 . If you care to see a House you can buy in Atherton for $7,998,000, check out https://www.realtor.com/realestateandhomes-detail/2-Parkwood-Dr_Atherton_CA_94027_M14635-91480?ex=2942090233 .
The Federal Reserve (the Fed) has maintained a near-zero rate since early 2020 due to the negative effects on the world economy due to COVID-19 and supply chain issues. At their April 4th meeting, the FED aggressively raised their short-term federal funds by a half-point, which marks the largest hike in more than two decades. This action was taken to control inflation which is raging higher than at any time since the early 1980s. While the FED does not directly set mortgage interest rates, they do influence rates. Mortgage interest rates have increased close to 2% since the beginning of 2022 and many economists predict they will continue climbing. As of April 5th, you could lock in a $640,000 30-year fixed-rate loan at 5.375%. Strange as it may seem, if you borrow more than $642,700, the rate will actually go down. Historically the lowest 30-year mortgage interest rate since 1970 was recorded in February 2021 at 2.65%, which was matched again in July 2021. The highest historical mortgage rate was recorded in 1981 @ 18.63%. As a comparison, a payment for a $640,000 mortgage in 1981 would have been $9,975/month; as of April 6th, it would be $3,584/month. Due to rising rates, refinancing activity has now dropped by 70% since last year.
Of the 136 sales in April 2022, 109 were over $1,000,000 which equates to 80% of the total sales, up from 75% in March. 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 PropertyShark, California has 89 of the 127 most expensive median-priced sales’ ZIP codes in the country with New York being the next highest with 17 ZIPs. Santa Barbara has 4 of the pricey ZIPs with Montecito’s 93108 ZIP coming in at #7 nationally. https://www.propertyshark.com/Real-Estate-Reports/most-expensive-zip-codes-in-the-us
According to USA Today, the national average for all-cash real estate sales was 33% in the first quarter of 2022, 25% in 2021, and 15% in 2020. On the South Coast in April 2022, 28% of the sales were cash sales, down from 38% in March. Review the attached list of the 136 properties sold on the South Coast of Santa Barbara County in April 2022 and/or contact me for information on specific sales.
On April 26th the Conference Board reported that the Consumer Confidence Index was 107.3, down from 107.6 in March. In recent years the highest Index level recorded was 137.9 in October 2018 and it was more recently as high as 132.6 in February 2020, prior to the start of the COVID-19 pandemic. Historically the highest Consumer Confidence Index level was recorded in September 2000 when the Index stood at 142.5. “Consumer confidence fell slightly in April, after a modest increase in March,” said Lynn Franco, Senior Director of Indicators at The Conference Board. “The Present Situation Index declined, but remains quite high, suggesting the economy continued to expand in early Q2. Expectations, while still weak, did not deteriorate further amid high prices, especially at the gas pump, and the war in Ukraine. Vacation intentions cooled but intentions to buy big-ticket items like automobiles and many appliances rose somewhat.” To review the full report: https://conference-board.org/data/consumerconfidence.cfm .
As for the worldwide cost of living as of May 5th, Expatistan compiled an index of 282 major metropolitan areas. The cost of gasoline was checked on May 5th. Expatistan’s list indicates #4 San Francisco with a 253 Price Index score is the most expensive area in California (a gallon of regular gas costs $5.41) and the least expensive is #94 Modesto with a Price Index score of 144 ($5.07/gallon). In the USA, #2 New York City @ 276 ($4.49/gallon) was the most expensive and the least expensive was #141 Cedar Rapids, Iowa @ 121 ($3.85/gallon). Of the top 25 most expensive areas worldwide, 3 are in California including San Francisco at #3, #17 San Diego @ 205 ($5.14/gallon), and #20 Sacramento @ 201 ($5.09/gallon). The most expensive area to live in the world is #1 Hamilton (Bermuda) @ 259 ($8.26/gallon) and the least expensive is #282 Eskisehir (Turkey) @ 20 ($5.20/gallon). Santa Barbara is not on the list as Expatistan does not rate it as a major metropolitan area, but local gas prices of $5.59/gallon are higher than larger California urban areas. At Furnace Creek, California (Death Valley) the cost of a gallon of gas is $8.94. Expatistan’s Cost of Living index is interesting to check out to compare the cost of living in cities around the world: https://www.expatistan.com/cost-of-living/index .
On May 5th, Danielle Hale at realtor.com wrote about national housing trends @ https://www.realtor.com/research/weekly-housing-trends-view-data-week-apr-30-2022/ :
“At the end of April, homes continue to sell quickly and continue to register double-digit yearly gains for a 20th week despite the monumental shift in financial conditions that have occurred over the past 4 months. Yesterday’s Fed statement and post-meeting press conference hammered home the Fed’s commitment to combating inflation, acknowledging that the massive shift will eat into demand, including for housing. This reality should help tame price growth as more options and fewer competitors enable buyers to be choosier.”
Historically the highest Year-to-Date median sales price recorded on the Santa Barbara South Coast was recorded back in 2007 at $1,031,500. In April 2022 the median sales price was $1,800,000, up from $1,775,000 in March and up 21% from 2021. The median sales price had been hovering near 2007’s historic high for most of 2017, 2018, and 2019, started an upward creep in 2020, and then accelerated in 2021. Now in 2022 new record high median sales prices are being set. In April 2022 the average South Coast sales price was $2,890,403.
Based on the Santa Barbara Multiple Listing Service data, as of May 1, in the City of Santa Barbara, there were 24 active House/PUD listings and 25 pending sales, which equates to an extremely low .96 month supply (up from .8 in April) of listings for Buyers to choose from. Generally a “one month’s supply” would indicate the listings would all be sold within one month. Under 3 months of inventory would be considered a basic Seller’s market where demand is high and inventory is scarce, lower than 2 months supply of inventory indicates a heated Seller’s market and lower than 1 month supply indicates 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 compare everything on the market. Based on Santa Barbara Multiple Listing Service data and as of May 1st, Carpinteria/Summerland had a 1.4 month supply (down from 2.6 in April), Montecito had a 1.9 month supply (up from 1.1 in April), Goleta had a .56 month supply (the same as in April) and Hope Ranch had a 2 month supply (up from 1 in April). These inventory statistics indicate that Carpinteria/Summerland, Montecito, and Hope Ranch are in a heated Seller’s market. Santa Barbara and Goleta are all in a feverish Seller’s market with less than one month’s worth of available inventory. With a combined total of 76 House/PUD pending sales and only 82 active listings on the South Coast of Santa Barbara County, there is only a 1.1 month supply of House/PUD listings from which Buyers can choose. With a combined total of 28 Condominium pending sales and only 19 active listings on the South Coast of Santa Barbara County, there is only a .68 month supply of Condominium listings from which Buyers can choose.
The ramifications of the concerns about COVID-19 and how it has and will continue to affect our world, the war in Ukraine, inflation, the cost of gas and scarcity of insurance companies in California, and rising premiums are also concerns to many Buyers, and Sellers too. Now that Proposition 19 has taken full effect, 55+ year-old homeowners can transfer their existing real estate tax base to a new home anywhere in California. Mortgage interest rates have risen lately but are still near historical lows. Extremely low inventory and the COVID-19 migratory trends toward smaller cities all have led to a surge in Santa Barbara property values. With a glut of qualified Buyers and low inventory, do not expect to see values going down anytime soon. It is good to know that the mortgage lenders are following very strict rules when qualifying Buyers (if they actually need a loan) as most Buyers are obtaining fixed-rate loans; according to Bloomberg, 60% of mortgages during the real estate bubble years 2006-2008 had an adjustable-rate; fewer than 0.1% of mortgages are adjustable now, but that may change with the recent rise in fixed-rate interest rates. Supply and demand dynamics have and will continue to affect the South Coast of the Santa Barbara Real Estate Market now and for a long time to come.
Feel free to contact me with any questions.
Stan Tabler, CRS, GRI, ABR, GREEN
801 Chapala Street
Santa Barbara, CA 93101
CalBRE Brokers License #00774377 since 1980