Santa Barbara South Coast Real Estate Update
November 15, 2020
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 an amazing 72% from 155 in October 2019 to 267 in October 2020. In October 2020 there were 183 House/PUD sales, up an amazing 68% from 2019, with a median sales price of $1,750,000 and an average sales price of $3,193,891. In October 2020 there were 84 Condominium sales, up 83% from 2019, with a median sales price of $786,000 and an average sales price of $925,714. In a combined total, there were 1,683 residential sales from January through October which is up 3% from 2019, with a median sales price of $1,195,000 which is up 18% from 2019.
In Carpinteria there were a total of 17 sales in October 2020, up from 15 in September. In October 2020 the median price of the 5 House/PUD sales was $1,076,000 and the average price was $1,535,500. In October 2020 the median price of the 12 Condominium sales was $752,250 and the average price was $742,792. The lowest priced Carpinteria sale in October 2020 was a Condominium on Eighth Street @ $525,000 and the highest was an Estate on Foothill Road @ $3,250,000.
In Summerland there were a total of 9 sales in October 2020, up from 5 in September. In October 2020 the median price of the 8 House/PUD sales was $2,480,000 and the average price was $3,795,000. In October 2020 the sale price of the 1 Condominium sale was $1,100,000. The lowest priced Summerland sale in October 2020 was a Condominium on Banner Avenue @ $1,100,000 and the highest was an Estate on Asegra Road @ $8,550,000.
In Montecito there were a total of 54 sales in October 2020, up from 17 in September. In October 2020 the median price of the 46 House/PUD sales was $3,175,000 and the average price was $6,948,565. In October 2020 the median price of the 8 Condominium sales was $1,572,250 and the average price was $1,623,750. The lowest priced Montecito sale in October 2020 was a Condominium on Virginia Road @ $900,000 and the highest was an Estate on East Valley Road @ $63,250,000.
In Santa Barbara there were a total of 118 sales in October 2020, up from 54 in September. In October 2020 the median price of the 75 House/PUD sales was $1,538,000 and the average price was $1,957,713. In October 2020 the median price of the 43 Condominium sales was $810,000 and the average price was $979,837. The lowest priced Santa Barbara sale in October 2020 was a Condominium on Modoc Road @ $510,000 and the highest was an Estate on Sea Cliff Road @ $7,890,000.
In Hope Ranch there were a total of 6 sales in October 2020, down from 9 in September. In October 2020 the median price of the 6 House sales was $4,375,000 and the average price was $4,254,667. There are no Condominiums in Hope Ranch. The lowest priced Hope Ranch sale in October 2020 was a House on Estrella Drive @ $1,908,000 and the highest was an Estate on East Cresta Avenue @ $6,650,000.
In Goleta there were a total of 63 sales in October 2020, down from 65 in September. In October 2020 the median price of the 43 House/PUD sales was $1,015,000 and the average price was $1,266,372. In October 2020 the median price of the 20 Condominium sales was $555,000 and the average price was $631,175. The lowest priced Goleta sale in October 2020 was a price controlled Condominium on Asilomar Way @ $309,000 and the highest was a House on Villa Brigitte @ $2,950,000.
Analysis
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 safety protocols are in place for any in-person by appointment only showings of listings. Due to virus concerns many Sellers have completely cancelled their listings for a time and this only exacerbated the lack of housing inventory on the market for a while. 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 folks are fleeing from highly populated areas to more lightly populated areas such as the South Coast. We have been tracking where the Buyers are coming from and at least 40% 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 November 1st there were 199 active House/PUD listings (down from 234 in October) and 63 active Condominium listings available (down from 73 in October). Historically there has been much more inventory available in the higher price ranges than in the lower ranges; as of October 1st 44% of the 234 active House/PUD listings were located in the higher valued Montecito and Hope Ranch areas. Compare the 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 1,297 active listings available.
During each month of 2019 and 2020, sales of bank-owned properties ranged between zero and three. There has been only 1 bank-owned sale along the South Coast of Santa Barbara County in 2020. As of November 1st there were no bank owned listings for sale on the South Coast of Santa Barbara County and 3 bank owned listings in escrow: an Estate on Hidden Valley Lane @ $4,695,000 (reduced asking price), Cresta Avenue @ $3,050,000 and a house on Las Positas Place @ $979,999. There have been a few distress sales, but foreclosure sales along the South Coast of Santa Barbara County are few and far between due to home equity rising quickly allowing Owners to “bail out” their distressed properties. To check out California’s foreclosure by county, visit this RealtyTrac link: California Foreclosure Trends by County .
As of September 2020 (the latest data available from CoreLogic), the highest recorded County median sales price in California was in San Mateo County @ $1,420,000 (up 9.2% from 2019) and the lowest recorded County median sales price was in Siskiyou County @ $225,000 (up 32.4% from 2019). The median sales price in the County of Santa Barbara was $730,000 (up 35.2% from 2019) and the median sales price in the City of Santa Barbara was $1,517,000 (up 31.9% from 2019). Other than residential fire-lot sales, the lowest median sales price recorded in any California city was in Boron in Kern County @ $85,000 (down 18.7 from 2019) and the highest was in Atherton in San Mateo County @ $9,450,000 (up 47.7% from 2019). You could buy 111 median priced Houses in Boron, 13 in the County of Santa Barbara or 6.2 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 Boron for a mere $83,000 check out https://www.realtor.com/realestateandhomes-detail/27108-Cote-St_Boron_CA_93516_M17848-85994 . If you care to see an Estate you can buy in Atherton for $9,450,000 check out https://www.realtor.com/realestateandhomes-detail/147-Laurel-St_Atherton_CA_94027_M25707-36737 .
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. Fed Chair Jerome Powell spoke on November 12th and said “The economy as we knew it might be over. My sense is that we will need to do more and that Congress will need to do more. The main risk we see today is the further spread of disease here in the United States.” The Fed is likely to keep interest rates at existing low levels much longer than analysts had recently predicted. As of October 2nd you could get a $510,000 30-year fixed rate loan at 2.625%, or less. Historically the lowest 30-year mortgage interest rate since 1970 was recorded in 2012 @ 3.31%, so we now have set a new average low @ 2.625%. 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 only $2,048/month.
Of the 267 sales in October 2020 there were 173 over $1,000,000 which equates to 64.8% 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 October 2020, 25% were cash sales, down from 28% in September and 47% in August. See the attached list of the 267 properties sold on the South Coast of Santa Barbara County in October 2020 and/or contact me for more information on specific sales.
On October 27th the Conference Board reported that the Consumer Confidence Index stood at 100.9 down from 101.3 in September and up from 86.3 in August. 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. “Consumer confidence declined slightly in October, following a sharp improvement in September,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved while expectations declined, driven primarily by a softening in the short-term outlook for jobs. There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high.” You may review the full report at https://conference-board.org/data/consumerconfidence.cfm .
As for the cost of living as of November 1, 2020, Expatistan has compiled data from 212 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 240 and the least expensive are # 118 San Juan, PR @ 121 and #114 Memphis, TN @ 124. Of the top 25 most expensive areas worldwide, 4 are in California: #6 San Francisco @ 233, #12 Oakland @ 211, #20 Los Angeles @ 196 and #21 San Jose @ 194. The most expensive area to live in the world is #1 Hamilton (Bermuda) @ 282 and the least expensive is #212 Coimbatore (India) @ 49. 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 November 12th, Danielle Hale, a Senior Research Analyst at realtor.com compiled these national property listing statistics:
Median listing prices continue to grow at 12.9 percent over last year, marking the 13th consecutive week of double-digit price growth. Economists, market watchers, and most especially buyers have been looking for signs of a slowdown in the housing market that has been red hot since its post-pandemic (sic) recovery. So far, at least, the median listing price continues to defy gravity.
New listings were down 12 percent. The new listings trend took another step back this week. Earlier in the year, new listings growth was tied closely to the prevalence of coronavirus spread in various housing markets. The second week of larger declines in new sellers could be related to rising new coronavirus cases. New listings are a necessary ingredient for further home sales, so additional improvement here will be important for home buyers and sustaining home sales activity.
Total inventory was down 39 percent. After five steady weeks at 38 percent, the total number of homes available for sale shrank by a slightly larger amount this week. Fewer new sellers coming to market while a greater than usual number of buyers continue to search for a home causes inventory to continue to evaporate.
Time on market is still 13 days faster than last year. With limited homes available for sale, those that are on the market are selling quickly–roughly 2 weeks faster than a year ago. For 7 weeks now, we’ve seen homes sell 13 or 14 days faster than last year. We typically see a big increase in time on market before the end of November. If this indicator remains steady in the weeks ahead, that points to a seasonal slowdown, but if time on market shrinks by a greater amount, that’s a signal that this year’s housing market is not taking the holidays off.
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 October 2020 the Year-to-Date median sale price was $1,195,000, 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 and now is setting new records. The October 2020 average sale price was $1,933,283, which is well above the highest historical average sale price recorded in 2007 at $1,787,898.
Based on the Santa Barbara Multiple Listing Service, as of October 1st, in the City of Santa Barbara there were 68 active House/PUD listings and 84 pending sales, which equates to a mere .81 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 October 1st, Carpinteria/Summerland had a 1.2 month supply, Montecito had a 3.6 month supply, Goleta had a .73 month supply and Hope Ranch had a 1.3 month supply. These inventory statistics indicate that Carpinteria, Summerland, Hope Ranch, Santa Barbara and Goleta are in a very feverish Seller’s market with less than a month’s worth of inventory. Montecito is in a fairly balanced market. These supply levels are all extremely low for all of the areas, but it is extremely interesting to note just how low the supplies are in Montecito with a 3.6 (down from 7.6 last November) and Hope Ranch with a 1.3 month supply (down from 4.6 last November). With a total of 162 House/PUD pending sales and only 199 active listings on the South Coast of Santa Barbara County, there is only a 1.2 month supply of House/PUD listings from which to choose. With a total of 62 Condominium pending sales and only 63 active listings on the South Coast of Santa Barbara County, there is a 1 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, the tumultuous stock market, demonstrations, 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
Compass
801 Chapala Street
Santa Barbara, CA 93101
805.689.2305
CalBRE Brokers License #00774377 since 1980
Realtor of the Year
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