The decision to purchase real estate or to place your home for sale in the Santa Barbara real estate market can be one of the biggest you and your family will make at any given time. This decision can be made easier if you are adequately informed about the buying and selling process, the local real estate market and the neighborhoods and communities in which you are interested. As a local real estate professional with more than thirty years of experience helping buyers and sellers just like you, it would be my great pleasure to introduce you to the Santa Barbara Real Estate Services I offer to both buyers and sellers.
For sake of simplicity, buying a home is a three-step process: finding the right community, finding the right home and negotiating the best contract terms. For your convenience, I have compiled a wealth of information on local communities and their real estate trends as well as provided you access to the search the entire Santa Barbara MLS to view available properties. Once we have narrowed down the ideal community and the right home, I will use my many years of experience and expertise and my Santa Barbara Real Estate Services to negotiate the contract terms to suit your needs and to exceed your expectations.
For sellers, I believe you will find my commitment to untiring communication and service, masterful marketing and negotiation skills to be most refreshing. Resulting from years of extensive experience and research, a superior ability to anticipate problems and solve them and unsurpassed ethics and professionalism, you will find these qualities will help your home sell quickly and for its highest dollar.
Whether you are moving across town or across the country, it would be my great pleasure to assist you with all your housing needs and to share my Santa Barbara Real Estate Services with you and your family. Please feel free to browse my Santa Barbara Home Buying and Selling Tips at your leisure and do not hesitate to contact me, Stan Tabler at your convenience. I look forward to hearing from you soon and assisting you with all your real estate goals, big and small.
Santa Barbara South Coast Real Estate Update
September 18, 2023
According to data obtained from the County Recorder’s Office by Fidelity National Title, residential property sales on the Santa Barbara South Coast decreased by 20% in August 2023, with 106 sales recorded, compared to 133 in August 2022. Out of the 106 sales in August 2023, 73 were houses or planned unit developments (PUD), down 25% from 2022. The median price of these House/PUD sales was $1,910,000, down 16% from 2022, and the average sale price was $2,726,486, down 19% from 2022. There were 33 Condominium sales in August 2023, down 8% from 2022. The median price of these Condominium sales was $1,025,000, up 1% from 2022, and the average sale price was $1,478,985, up 25% from 2022. Year-to-date in 2023, there has been a total of 761 residential property sales on the South Coast of Santa Barbara County, down 29% from 2022. The year-to-date median price for all residential property sales as of August 2023 was $1,675,000, down 6% from 2022, and the average sale price was $2,569,118, down 7% from 2022.
In Carpinteria, there were a total of 17 residential sales in August 2023, up from 11 in July. In August 2023 the median price of the 8 House/PUD sales was $1,387,500 and the average price was $1,447,100. In August 2023 the median price of the 9 Condominium sales was $800,000 and the average price was $758,889. The lowest-priced Carpinteria sale in August 2023 was a Condominium on Sandyland Road @ $450,000 and the highest was a House on Foothill Road @ $2,050,000.
In Summerland, there were no residential sales in July or August 2023.
In Montecito, there were a total of 14 residential sales in August 2023, up from 11 in July. In August 2023 the median price of the 9 House/PUD sales was $5,153,000 and the average price was $6,229,556. In August 2023 the median price of the 5 Condominium sales was $2,845,000 and the average price was $2,795,000. The lowest-priced Montecito sale in August 2023 was a house on Clayton Circle @ $2,100,000 and the highest was an Estate on Las Entradas @ $15,585,000.
In Santa Barbara, there were a total of 50 residential sales in August 2023, up from 46 in July. In August 2023 the median price of the 40 House/PUD sales was $2,003,278 and the average price was $2,469,884. In August 2023 the median price of the 10 Condominium sales was $1,372,500 and the average price was $1,707,900. The lowest-priced Santa Barbara sale in August 2023 was a Condominium on Richland Drive @ $565,000 and the highest was a House on Las Alturas Road @ $6,250,000.
In Hope Ranch, there were a total of 2 residential sales in August 2023, up from 1 in July. In August 2023 the median and average price of the 2 House sales was $4,950,000. There are no Condominiums or PUDs in Hope Ranch. The lowest-priced Hope Ranch sale in August 2023 was a House on Las Palmas Drive @ $4,700,000 and the highest was a House on Via Hierba @ $5,200,000.
In Carpinteria, there were a total of 23 residential sales in August 2023, down from 29 in July. In August 2023 the median price of the 14 House/PUD sales was $1,440,000 and the average price was $1,621,208. In August 2023 the median price of the 9 Condominium sales was $1,225,000 and the average price was $1,213,333. The lowest-priced Goleta sale in August 2023 was a Family Transfer of a House on Rio Vista Drive @ $800,000 and the highest was a House on La Espada Drive @ $3,843,000.
Analysis
The real estate market on the Santa Barbara South Coast has been affected by various factors. Many Sellers who were previously hesitant to list their homes due to the pandemic, listed and sold their properties in 2022, but the inventory of listings for sale still remains relatively low. Historically low mortgage interest rates have risen dramatically since earlier in 2022 and this is now providing a financial incentive for homeowners to remain in their current homes with mortgage rates of 3% or less.
As of September 1st, there were 143 (up from 139 in August) active House/PUD listings and 32 (up from 25 in August) active Condominium listings available along the Santa Barbara South Coast. This is a significant reduction compared 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 Santa Barbara South Coast was recorded in June of 1992 when there were an astonishing 1,297 active listings available for Buyers to choose from.
Bank-owned sales on Santa Barbara’s South Coast have been rare; in all of 2021 and 2022, there were only 4 bank-owned sales. There have been no bank-owned sales in 2023. There is currently one bank-owned listing available; an oceanfront estate on Marina Drive in Hope Ranch listed for $21,500,000 (this may rate as the highest bank-owned residential property in all of California). Mortgage payment delinquency rates fell to 3.37% at the end of the second quarter of 2023, according to the Mortgage Bankers Association’s National Delinquency Survey, their lowest since the MBA began collecting data in 1979 and down from 3.64% year-on-year. Rising home equity has allowed most owners to “bail out” of their financially distressed properties, pay off the mortgage, and avoid foreclosure. There have been a few short sales and bankruptcy sales where an owner’s debt has had to be restructured resulting in the sale of a property. To check out California’s foreclosure list by County, check out this link: California Foreclosure Trends by County .
On August 25th, Federal Reserve Chair Jerome Powell said “Although inflation has moved down from its peak — a welcome development — it remains too high.” Powell said in prepared remarks for his keynote address at the Federal Reserve’s annual retreat in Jackson Hole, Wyoming: “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.” US hiring picked up in August and wage growth slowed, offering a mixed picture of resilience and downshifting in the job market. Employers added 187,000 jobs in August, beating estimates, while wage growth is at the slowest pace since early last year. The unemployment rate ticked up to 3.8%, partly reflecting a pickup in labor-force participation. We can hope that the moderation gives the Federal Reserve room to pause interest-rate hikes later this month as it seeks to slow inflation while avoiding a downturn.
Mortgage interest rates have more than doubled since the beginning of 2022 and rates of over 7% on 30-year fixed rate mortgages were higher than they have been in 22 years. As of September 1st, you could lock in a $726,200 30-year fixed-rate loan at 6.75% with a 1% loan fee (down from 7.1% in August). Historically the lowest 30-year mortgage interest rate since 1970 was recorded in February 2021 at 2.65% and that rate was matched yet again in July 2021 during the pandemic. The highest historical conforming mortgage rate was recorded in 1981 @ 18.63%. As a comparison, a mortgage payment for a $726,200 mortgage in 1981 would have been $11,318/month, the payment in July 2021 would have been $2,926/month, and as of September 1st, the payment would be $4,710/month. Many potential buyers have switched to applying for adjustable-rate loans in anticipation of fixed-rate mortgages moving lower in the future. At the same time, many homeowners are waiting, unwilling to list their homes and trade their sub-3% mortgages to borrow at 6% or 7% for a replacement home. This mortgage rate factor is one of the reasons there is limited listing inventory and therefore limited 2023 home sales as compared to 2022.
According to Business Insider, cash buyers represented 33.4% of the national sale transactions, far above levels around 25% for the last 10 years. Some areas have a much higher percentage of all cash sales; as an example in 2023, 65% of the real estate sales in Manhattan were all cash, a nine-year high. On the Santa Barbara South Coast in August 2023, 43% of the sales were cash sales, nearly the same percentage as in July.
Of the 106 residential sales in August 2023, 90 were over $1,000,000 which equates to 84.9% of the total sales, up from 78.6% in June. The South Coast of Santa Barbara is not an inexpensive place to purchase real estate 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’s 2022 report (most recent), California had 7 of the 10 most expensive median-priced ZIP codes in the country. Montecito’s 93108 ZIP came in at #8 nationally. Check out: https://www.propertyshark.com/Real-Estate-Reports/most-expensive-zip-codes-in-the-us
According to a USA Today article recently published, the “Cost of Happiness” as measured by an individual’s income in cities within the United States, Santa Barbara came in as #1; you need an income of $162,721 to be “Happy”. On the other end of the spectrum, if you lived in Knoxville, Tennessee you would only need an income of $88,032 to be “Happy”. Yes, Santa Barbara is a desirable and expensive place to live! Check out the full article: https://www.usatoday.com/story/money/personalfinance/2023/09/08/cost-of-happiness-by-country-cities/70771946007/
The NAHB/Wells Fargo Housing Market Index in the United States decreased to 50 in August of 2023, after rising for 7 consecutive months. “Rising mortgage rates and high construction costs stemming from a dearth of construction workers, a lack of buildable lots and ongoing shortages of distribution transformers put a chill on builder sentiment in August,” said NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham. “But while this latest confidence reading is a reminder that housing affordability is an ongoing challenge, demand for new construction continues to be supported by a lack of resale inventory, as many home owners elect to stay put because they are locked in at a low mortgage rate.”
The Conference Board Consumer Confidence Index® declined in August to 106.1 (1985=100), from a downwardly revised 114.0 in July. “Consumer confidence fell in August 2023, erasing back-to-back increases in June and July,” said Dana Peterson, Chief Economist at The Conference Board. “August’s disappointing headline number reflected dips in both the current conditions and expectations indexes. Write-in responses showed that consumers were once again preoccupied with rising prices in general, and for groceries and gasoline in particular. The pullback in consumer confidence was evident across all age groups—and most notable among consumers with household incomes of $100,000 or more, as well as those earning less than $50,000. Confidence held relatively steady for consumers with incomes between $50,000 and $99,999.”
As for the worldwide cost of living as of September 2023, Expatistan compiled an index of 207 major metropolitan areas. Gas prices were checked on September 1st and have since risen dramatically. In the USA, the most expensive area to live in is #2 New York City with a 216 Price Index score (the least expensive gallon of regular gas costs $3.79/gallon) and the least expensive is #142 Cedar Rapids, Iowa @ 88 ($3.49/gallon). Expatistan’s list indicates that #11 Oakland @ 180 is the most expensive area in California ($5.09/gallon) and the least expensive is #38 Walnut Creek @ 142 ($5.59/gallon). Searching the entire state of California, the least expensive gallon of gas can be bought in Yuba County for $4.74/gallon. Of the top 25 most expensive areas worldwide, only two are in California (down from 4 in August), #11 Oakland and #14 San Jose @ 175 ($4.85/gallon). The most expensive area to live in the world is #1 Grand Cayman @ 217 ($5.90/gallon) and the least expensive is #207 Yogyakarta (Indonesia) @ 39 ($3.40/gallon). Santa Barbara is not on the list as Expatistan does not rate it as a major metropolitan area. Local gas prices as low as $4.98/gallon are similar to other California coastal areas. Expatistan’s Cost of Living Index is an interesting way to compare the cost of living in cities around the world: https://www.expatistan.com/cost-of-living/index
On August 31st, Danielle Hale and Sabrina Speianu of Realtor.com wrote “According to August housing data, listing prices have resumed their upward trajectory compared to the previous year, buoyed by a persistently low inventory even in the face of subdued demand resulting from rising mortgage rates. After experiencing a growth phase since last April, the nation’s active inventory has now shrunk compared to last year for the second consecutive month. Although June and July witnessed a decline in listing prices on an annual basis, August marked a turning point as the median list price across the nation stabilized in comparison to the preceding year. While inventory continues to be in short supply, August witnessed an unusual uptick in newly listed homes compared to July, hopefully signaling a return in seller activity heading toward the fall season which typically is the best time to buy a home.” Check out the full article at https://www.realtor.com/research/august-2023-data/
Historically the highest Year-to-Date median sales price recorded on the Santa Barbara South Coast was recorded in 2007 at $1,031,500. In August 2023 the median sales price was $2,060,00 for Home/PUDs and $1,025,000 for Condominiums. The median sales price had been hovering near 2007’s historic high for most of 2017, 2018, and 2019, then started an upward climb in 2020, accelerating in 2021 and into most of 2022. In early 2022 new record-high median sales prices were set each month and in 2023 they seem to have leveled off a bit.
Based on the Santa Barbara Multiple Listing Service data, as of September 1st in the City of Santa Barbara, there were 60 active House/PUD listings (down from 66 in August) and 28 pending sales (down from 30 in August), which equates to a 2.1-month supply (down from 2.2 in August) of listings for Buyers to choose from. Generally, a 1-month supply would indicate the listings would all be sold within one month. A less than 1-month supply of inventory indicates a feverish Seller’s market, a 1-to-2-month supply indicates a heated Seller’s market and a 2-to-4-month supply would be considered a basic Seller’s market where Buyer demand is still high and inventory is scarce. Historically a 4-to-6-month supply of available inventory would indicate a fairly well-balanced, normal market between Buyers and Sellers. Typically more than a 6-month supply is considered to be a Buyer’s market where inventory is plentiful; Buyers will be slower to make decisions as they compare the numerous properties on the market. Based on Santa Barbara Multiple Listing Service data and as of September 1st, Carpinteria/Summerland had a 4-month supply (up from 2.5 in August), Montecito had a 3-month supply (down from 7.2 in August), Goleta had a 2.8-month supply (up from 2.5 in August) and Hope Ranch had a 6.5-month supply (up from 6 in August). These inventory statistics indicate that Santa Barbara, Goleta, and Montecito have moved up into a basic Seller’s market. Carpinteria/Summerland have moved into a well balanced market. Hope Ranch remains in a Buyer’s market. With a combined total of 51 House/PUD pending sales (same as in August) and 143 active listings (up from 139 in August) along the South Coast of Santa Barbara County, there is only a 2.8-month supply (up from 2.7 in August) of House/PUD listings from which Buyers can choose. With a combined total of 19 Condominium pending sales (up from 12 in August) and only 32 active listings (up from 26 in August) on the South Coast of Santa Barbara County, there is a 1.7-month supply (down from 2.2 in August) of Condominium listings from which Buyers can choose. The South Coast market as a whole has moved into a basic Seller’s market. The South Coast of Santa Barbara County market remains in a state of transition and has been slowly moving towards a more balanced market. Santa Barbara real estate values have been more resilient to the downward pressures than other parts of the country. In many Buyers’ minds, the sense of urgency to purchase a home has tapered off a bit with more inventory to choose from and pursue. People still want to live along the Santa Barbara South Coast to enjoy the Mediterranean weather and our casual lifestyle.
While concerns about the pandemic’s economic impact have diminished, there are several other concerns for many Buyers and Sellers. These include the ongoing conflict in Ukraine, inflation, the cost of gasoline, rising premiums, rising mortgage rates, and the possibility of a recession. Now a major concern is the scarcity of homeowners’ insurance coverage, especially since State Farm and Allstate have recently refused to issue new insurance policies to California home buyers. California’s Proposition 19, which has now taken full effect, allows homeowners aged 55+ to transfer their existing real estate tax base to a home anywhere in the State; this change should be encouraging to some older Sellers who wish to sell their current homes and find a suitable replacement. Due to low inventory and increased migration trends towards smaller cities during the pandemic, a trend which continues to this day, there has been a surge in property values on the Santa Barbara South Coast. While market corrections may still negatively impact property values on the Santa Barbara South Coast, the impact is expected to be less severe compared to many other areas in the state and country. New listings in 2023 may remain on the market a bit longer than in 2022, but each week I am still seeing multiple offers on certain well-priced listings, one of my recent listings had 9 offers presented! Rising home values in the Santa Barbara South Coast Real Estate Market continue to be positively affected by supply and demand dynamics due to persistent low listing inventory; I expect this dynamic to continue into the foreseeable future.
Review the attached list of the 106 properties sold on the Santa Barbara South Coast in August 2023 and feel free to contact me for information on specific sales in our area.
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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