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
As of 3/31/2017
Single Family Residence/PUD Market
Median Sales Price = $1,181,683
Lowest Sale Price = $485,000
Highest Sale Price = $12,750,000
Median Sales Price = $575,000
Lowest Sale Price = $298,000
Highest Sale Price = $1,595,000
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
June 14, 2017
Direct from the County Recorder’s Office, the overall number of property sales on the South Coast of Santa Barbara County was down 6% from 175 in May 2016 to 164 in May 2017 while the median sales price was up 9% from $945,000 in May 2016 to $1,015,000 in May 2017 and the average sales price was up 2% from $1,396,740 in May 2016 to $1,523,168 in May 2017. In May 2017 there were 125 Single Family Residence sales with a median sales price of $1,200,000 and an average sales price of $1,523,168. In May 2017 there were 38 Condominium sales with a median sales price of $597,500 and an average sales price of $714,884.
In Carpinteria the number of sales was down 7% from 15 in May 2016 to 14 in May 2017. The median sales price was up 122% from $725,000 in May 2016 to $1,612,500 in May 2017 and the average sales price was down 15% from $1,540,700 in May 2016 to $1,315,889 in May 2017. The lowest Carpinteria sale price in May 2017 was a condominium on Foothill Road for $324,000 and the highest was a house on Sand Point Road for $6,100,000 (50% interest only).
In Summerland there was one sale reported in May 2017 at 2387 Whitney Avenue for $1,325,500.
In Montecito the number of sales was down 4% from 26 in May 2016 to 25 in May 2017. The median sales price was up 12% from $2,377,500 in May 2016 to $3,200,000 in May 2017 and the average sales price was up 12% from $3,112,481 in May 2016 to $3,484,200 in May 2017. The lowest Montecito sale price in May 2017 was a small house on Barker Pass Road for $1,200,000 and the highest was a house on Hot Springs Road for $15,925,000.
In Santa Barbara the number of sales was up 16% from 86 in May 2016 to 100 in May 2017. The median sales price was up 2% from $990,500 in May 2016 to $1,015,000 in May 2017 and the average sales price was up 11% from $1,124,831 in May 2016 to $1,245,875 in May 2017. The lowest Santa Barbara sale price in May 2017 was a small house on Santa Barbara Street for $375,000 and the highest was a house on Austin Road for $4,249,000.
In Hope Ranch the number of sales was down 33% from 3 in May 2016 to 2 in May 2017. The median sales price was down 12% from $2,200,000 in May 2016 to $1,930,500 in May 2017 and the average sales price was down 19% from $2,291,667 in May 2016 to $1,930,500 in May 2017. The lowest Hope Ranch sale price in May 2017 was a house on Lago Drive for $1,880,000 and the highest was a house on Laguna Blanca Drive for $1,981,000.
In Goleta the number of sales was down 52% from 44 in May 2016 to 21 in May 2017. The median sales price was down 14% from $775,000 in May 2016 to $664,000 in May 2017 and the average sales price was down 20% from $812,136 in May 2016 to $652,905 in May 2017. The lowest Goleta sale price in May 2017 was a Condominium on Dearborn Place for $340,000 and the highest was a house on Buttonwood Lane for $885,000.
A limited supply of available properties along the South Coast of Santa Barbara County is keeping values higher than one might expect as compared to many inland areas of California and most areas of the United States. On the South Coast of Santa Barbara County as of June 13th, there were only 365 active House/PUD listings and 102 Condominium listings available for purchase. Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 41% (149) of the 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.
On the South Coast of Santa Barbara, in May 2017, there were 3 bank-owned property sales. As of June 13th there was 1 active bank-owned listing available from Carpinteria through Goleta. As of May 13th there were no bank-owned listings in escrow. Compare our very small number of foreclosure sales to 17% in New Jersey and 6% nationwide. Check out Realty Trac’s list: http://www.realtytrac.com/statsandtrends/foreclosuretrends/ca
As of April 2017 (the latest available data from CoreLogic) the highest recorded median County sales price in California was in San Francisco City/County @ $1,244,000 (down 4.3% from 2016) and the lowest recorded median sales price was in Siskiyou County @ $161,300 (up 35.5% from 2016). The median sales price in the County of Santa Barbara was $526,500 (up 10.8% from 2016) and the median sales price in the City of Santa Barbara was $1,075,000 (up 4.9% from 2016). The lowest median sales price in any California city was in Avenal in Kern County @ $49,500 (down 52.5% from 2016) and the highest was in Atherton in San Mateo County @ $5,100,000 (down 11.5% from 2016). You could buy 103 median priced houses in Avenal, 9.7 in the County of Santa Barbara or 4.7 in the City of Santa Barbara for the same price as 1 house in Atherton. Each week Trulia does a national sales survey to determine the median sales prices in each of the States and the District of Columbia; for the week ending May 31, 2017, the District of Columbia had the highest median sales price @ $539,000 and was ranked #46 in Trulia Popularity, West Virginia had the lowest @ $135,000 and was ranked #41 in Trulia Popularity and California was in 2nd place @ $450,000 and was ranked #1 in Trulia Popularity. To review Trulia’s maps of sales activity: http://www.trulia.com/home_prices/
Coldwell Banker’s Home Listing Report for 2016 analyzed the average listing price of more than 50,000 4-bedroom, 2-bathroom homes and then ranked 2,168 markets across the USA. California took up 15 of the top 20 most expensive cities with Santa Barbara coming in at #15 with an average price of $1,165,727. The #1 average price was $2,453,718 in Saratoga, CA and dead last at #2,168 was Detroit, MI at $64,110. To review the complete list: https://www.coldwellbanker.com/hlr/2016
The Federal Reserve (the Fed) held short-term interest rates unchanged in May and is now unwinding the $4.5 trillion of bonds it holds on its balance sheet. In a 2013 speech Ben Bernanke stated “If monetary policymakers are expected to keep short-term interest rates low, then current longer-term interest rates are likely to be low as well, all else being equal. In short, for monetary policy, expectations matter.” Bernanke’s prediction is holding true at this time, but the Fed’s intention to reduce its security holdings may have significant intangible results, including raising mortgage interest rates.
Of the 164 sales on the South Coast in May 2017, 83 were over $1,000,000 which equates to 51% of the total sales, up from 49% in April (I believe this is a historical high at 51%). Compare our 47% to San Francisco’s 57.4% and San Jose’s 46.3%. 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 just pay more to live and invest here.
On May 30th, the Conference Board reported that the Consumer Confidence Index stood at 117.9 down from 119.4 in April (124.9 was a 16.5 year high in March 2017). Lynn Franco, Director of Economic Indicators at the Conference Board, stated “Consumer confidence decreased slightly in May, following a moderate decline in April.”
There were 47 cash transactions out of a total of 164 sales in May 2017, which equates to 29% of the properties being sold for cash, up from 23% in April. The lowest percentage occurred in June 2013 when only 13% of the sales were all cash and the highest was in January 2016 when 36% of the sales were all cash. The highest year-to-date 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 2017 is $928,000, so the median sales price is within striking distance of that 2006 high mark and has been for the last year.
The local market is still slightly tipped in the Seller’s favor due to lack of available inventory although I do feel most prices have plateaued and softened in some neighborhoods, especially in the higher valued areas. Take for example the available inventory as of June 13th in Goleta where there were only 52 active House/PUD listings and 48 pending sales, which equates to only a 1.1 month supply of properties for Buyers to choose from. Historically somewhere around a 5 to 6 month supply of available inventory would indicate a balanced market between Buyers and Sellers. Based on Santa Barbara Multiple Listing Service data and as of June 13th, Carpinteria/Summerland had a 2.3 month supply, Montecito had a 5 month supply, Santa Barbara had a 1.7 month supply and Hope Ranch had a 4.7 month supply of inventory currently on the market. These numbers indicate that Goleta, Carpinteria/Summerland and Santa Barbara markets are tilting in the Seller’s favor while Montecito and Hope Ranch markets are tilting in the Buyer’s favor. With a total of 171 House/PUD pending sales and only 365 active listings on the South Coast of Santa Barbara County, there is only a 2.1 month supply of House/PUD listings to choose from. With a total of 56 Condominium pending sales and only 102 active listings on the South Coast of Santa Barbara County, there is 1.8 month supply of Condominium listings to choose from. Buyers can and will decide if a property is overpriced or underpriced and act on ones about which they feel confident. As the market pace has slowed a bit due to the season and inventory has risen slightly, we have seen the last of double-digit property appreciation for the time being. Local economists feel that the appreciation rate for the South Coast of Santa Barbara will be closer to 3% in 2017. Along with being a great time to buy a property if you can find one that meets your needs and lock in a still great long term mortgage rate, it is also a good time to sell a property as there is still a pool of willing buyers waiting for the ‘right’ property to come onto the market at the ‘right’ price.
Feel free to contact me with any real estate related questions!
Stan Tabler, CRS, GRI, ABR
Realtor of The Year
California Brokers License #: 00774377 Since 1980