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 to assisting you with all your real estate goals, big and small.
Santa Barbara South Coast Real Estate Update
June 13, 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 down 56% from 193 in May 2019 to 85 in May 2020. In May 2020 there were 65 House/PUD sales, down 52% from 2019, with a median sales price of $1,169,000 and an average sales price of $2,117,848. In May 2020 there were 20 Condominium sales, down 65% from 2019, with a median sales price of $810,000 and an average sales price of $963,000. The total of the combined January through May residential sales in 2020 was 564, down 27% from 2019, with a median sales price of $1,101,500 and an average sales price of $1,521,535.
In Carpinteria there were a total of 2 sales in May 2020, down from 3 in April. In May 2020 the median and average sales price of the 1 House/PUD sale was $995,000. In May 2020 the median and average sales price of the 1 Condominium sale was $445,000. The lowest priced Carpinteria sale in May 2020 was a Condominium on Birch Street @ $445,000 and the highest was a House on Carpinteria Avenue @ $925,000.
There were no sales in Summerland in April or May of 2020.
In Montecito there were a total of 18 sales in May 2020, up from 15 in April. The median sales price of the 15 House/PUD sales was $3,460,000 and the average sales price was $4,560,467. In May 2020 the median sales price of the 3 Condominium sales was $2,000,000 and the average sales price was $2,126,167. The lowest priced Montecito sale in May 2020 was a House on Orchard Avenue @ $925,000 and the highest was an Estate on East Valley Road @ $11,250,000.
In Santa Barbara there were a total of 34 sales in May 2020, down from 45 in April. The median sales price of the 29 House/PUD sales was $1,058,750 and the average sales price was $1,216,933. In May 2020 the median sales price of the 5 Condominium sales was $800,000 and the average sales price was $903,000. The lowest priced Santa Barbara sale in May 2020 was a House on San Pascual Street @ $604,500 and the highest was a House on Celine Drive @ $2,225,000.
In Hope Ranch there was one sale in May 2020, down from 3 in April. The median sales price and the average sales price was $10,500,000. There are no Condominiums in Hope Ranch. The lowest and highest priced Hope Ranch sale in May 2020 was an Estate on Cresta Avenue @ $10,500,000.
In Goleta there were a total of 30 sales in May 2020, up from 18 in April. The median sales price of the 19 House/PUD sales was $989,500 and the average sales price was $1,184,450. In May 2020 the median sales price of the 11 Condominium sales was $679,000 and the average sales price was $721,682. The lowest priced Goleta sale in May 2020 was a Condominium on Hollister Avenue @ $410,000 and the highest was a House on Boulder Ridge Road @ $2,700,000.
Analysis
The COVID-19 pandemic has not only affected our daily lives, but how everyone buys and sells real estate. Open houses and Broker Caravans are not allowed and serious protocols are in place for in-person showings of listings, by appointment only. Due to virus concerns many Sellers have completely cancelled their listings and this only has exacerbated the lack of housing inventory on the market. It is hard to grasp how to analyze the future effects of the virus on how we live our lives. The unemployment rate remains high, mortgage interest rates remain low and there appears to be pent-up Buyer demand for housing after the partial loosening of the stay-at-home restrictions. Also, some owners have decided that they need a larger home to accommodate a home office, and they may become Sellers and Buyers.
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. The appreciation rate along the South Coast has softened, but the pent-up Buyer demand and low inventory has kicked parts of our market into high gear. A family I represented as Buyers made an offer on a Goleta home only to find themselves in competition with 12 other offers. Just last week I listed two estate sale properties on the East Side, and to our astonishment we received 70 offers (this is a personal record for me)! Along the South Coast of Santa Barbara County as of June 5th there were 318 active House/PUD listings (up from 283 on May 1st) and 108 active Condominium listings (up from 86 on May 1st) available for sale. Generally, there is much more inventory available in the higher price ranges than in the lower ranges as 121 (38%) of the 318 active House/PUD listings are 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 for sale.
During each month of 2019 and 2020, sales of bank-owned properties ranged between zero and three. There were no bank-owned sales in January through May 2020. As of June 5th there were no bank owned listings for sale or in escrow on the South Coast of Santa Barbara County. There were no bank-owned property sales in May 2020. Foreclosure activity along the South Coast of Santa Barbara County has diminished dramatically. To check out California’s foreclosure by county, visit this RealtyTrac link: California Foreclosure Trends by County . Dr. Nothaft, the Chief Economist for CoreLogic, has recently stated “Home loan delinquency and foreclosure rates were the lowest in a generation before the COVID-19 pandemic hit. Recession-induced job losses will fuel delinquencies. However, wide-spread foreclosures across America will likely be averted because of the home equity buffer that homeowners have and the available forbearance programs. Our Home Equity Report found that at the start of 2020, homeowners with a mortgage also had an average of $177,000 in home equity.”
As of April 2020 (the latest data available from CoreLogic), the highest recorded County median sales price in California was in San Francisco County @ $1,340,000 (down 4.3% from 2019) and the lowest recorded County median sales price was in Plumas County @ $218,500 (down 27.2% from 2019). The median sales price in the County of Santa Barbara was $585,000 (down .5% from 2019) and the median sales price in the City of Santa Barbara was $1,167,500 (down 5.1% from 2019). The lowest median sales price recorded in any California city was in fire ravaged Paradise in Butte County @ $45,000 (down 86.6% from 2019) and the highest was in Los Altos in Santa Clara County @ $3,125,000 (up .7% from 2019). You could buy 69.5 median priced Houses in Paradise, 5.3 in the County of Santa Barbara or 2.8 in the City of Santa Barbara for the same price as 1 House in Los Altos. If you care to see a .66 acre fire lot you can buy in the Paradise for $45,000 check out https://www.realtor.com/realestateandhomes-detail/5805-Yorkshire-Dr_Paradise_CA_95969_M24502-23356?view=qv . If you care to see a 2,142 square foot House you can buy in Los Altos for $3,100,000 check out https://www.realtor.com/realestateandhomes-detail/292-Quinnhill-Rd_Los-Altos_CA_94024_M19950-85475?view=qv .
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. In March the Fed made an “emergency rate cut” to 0-.25%. The Fed has recognized that the COVID-19 outbreak is causing “tremendous human and economic hardship, sharp declines in economic activity and a surge in job losses, which weigh heavily on economic activity, employment and inflation and poses considerable risks to the economic outlook over the medium term.” At the Fed’s June 10th meeting they indicated that near-zero interest rates will last through 2022 to curb COVID-19 damage to the economy. At the Fed’s late May meeting, New York Federal Reserve President John Williams said “I think we’re kind of in a good place…maybe near the bottom in terms of the economic downturn and, hopefully, we’ll start seeing improvement in coming months.” The operative word there is “hopefully”. As of June 11th you can get a $510,000 30-year fixed rate loan at 2.85%. Historically the lowest 30-year mortgage interest rate since 1970 was recorded in 2012 @ 3.31%, so we are now setting a new low @ 2.85%. The highest mortgage rate was recorded in 1981 @ 18.63%. If you got a $510,000 mortgage in 1981, your payment would have been $7,949/month; now it would be $2,116/month.
Of the 85 sales in May 2020 there were 46 over $1,000,000 which equates to 54% 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 May 2020, 27% were cash sales, up from 16% in April. See the attachment for the total list of the 85 properties sold on the South Coast of Santa Barbara County in May 2020 and/or contact me for more information.
On May 26th the Conference Board reported that the Consumer Confidence Index stood at 86.6, up from 85.7 in April, down from 118.8 in March and down from 132.6 in February. In recent years the highest recent Index level recorded was 137.9 in October 2018. Historically the highest Consumer Confidence Index level was recorded in September 2000 when the Index stood at 142.5. “Following two months of rapid decline, the free-fall in Confidence stopped in May,” says Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The severe and widespread impact of COVID-19 has been mostly reflected in the Present Situation Index, which has plummeted nearly 100 points since the onset of the pandemic. Short-term expectations moderately increased as the gradual re-opening of the economy helped improve consumers’ spirits. However, consumers remain concerned about their financial prospects. In addition, inflation expectations continue to climb, which could lead to a sense of diminished purchasing power and curtail spending. While the decline in confidence appears to have stopped for the moment, the uneven path to recovery and potential second wave are likely to keep a cloud of uncertainty hanging over consumers’ heads.”
As for the cost of living in May 2020, Expatistan has compiled data from 242 major metropolitan areas worldwide. Expatistan’s list indicates Mountain View, CA at #4 is the most expensive area in the USA with a Price Index score of 258 and Memphis, TN at #134 is the least expensive with a score of 128. Of the top 25 most expensive areas worldwide, 5 are in California: #4 Mountain View @ 258, #7 San Francisco @ 247, #14 Oakland @ 219, #20 Los Angeles @ 203 and #23 San Jose @ 199. The most expensive area to live in the world is #1 Hamilton (Bermuda) @ 293 and the least expensive is #242 Madras (India) @ 55. Santa Barbara is not on the list as Expatistan has not rated it as a major metropolitan area. This is an interesting list to check out if you want to compare the cost of living in different cities around the world: https://www.expatistan.com/cost-of-living/index .
In his March 18, 2020 article, Nicolas Bedo at Realtor.com® wrote about the Luxury Market in the fourth quarter of 2019 and then about the current market uncertainty: “Continuing their upward trajectory, markets along the central coast of California keep thriving. Santa Barbara was the fastest growing luxury market in Q4, with prices reaching $2.88 million, up 25 percent compared to the same time last year. Million dollar sales in Santa Barbara were up 29 percent year over year. Monterey prices reached $2.36 million, up 24 percent year over year, with million dollar sales up 52 percent. San Luis Obispo luxury prices reached $1.38 million, growing 10.5 percent year over year, with million dollar sales up 72 percent. However, like the U.S. economy, luxury housing isn’t immune to the impacts both short and long-term of COVID-19. Many of the gains made in the luxury market in the fourth quarter could be erased as buyers are asked to stay home and sellers hunker down. It seems clear that COVID-19 is going to have far reaching consequences both in the U.S. and globally, the question that remains is just how much of an impact it will have.” Check out the complete article: https://www.realtor.com/research/tag/luxury-homes/
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 May 2020 the Year-to-Date median sales price was $1,101,500 down from $1,113,750 in April. The median sales price has been hovering just below or just above that historic high for most of 2017, 2018, 2019 and now into 2020. This is an indication of a leveling off in market values along the South Coast of Santa Barbara.
Based on the Santa Barbara Multiple Listing Service, as of June 5th, in the City of Santa Barbara there were 126 active House/PUD listings and 42 pending sales, which equates to a 3 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 more 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 June 5th Carpinteria/Summerland had a 3.3 month supply, Montecito had a 4 month supply, Goleta had a 1.5 month supply and Hope Ranch had a 3.6 month supply. All these inventory ratios are much lower than in early April. These inventory statistics indicate that Goleta is in a Seller’s market and the City of Santa Barbara, Carpinteria/Summerland, Montecito and Hope Ranch are mostly in a balanced market for the first time in quite a while. With a total of 106 House/PUD pending sales and only 318 active listings on the South Coast of Santa Barbara County, there is a 3 month supply of House/PUD listings to choose from. With a total of 38 Condominium pending sales and only 108 active listings on the South Coast of Santa Barbara County, there is a 2.8 month supply of Condominium listings for Buyers to choose from.
The ramifications of the concerns about COVID-19 and how it has & will affect our world, government spending in response to COVID-19, home insurance availability & 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 & debris flows in Montecito are concerns to many Sellers and Buyers along the South Coast of Santa Barbara County. That being said, Santa Barbara Buyers currently seem to be in a frenzied state due to pent-up demand and low inventory. The trajectory of COVID-19 itself cannot be predicted or what it may mean to our economy in the future. Lack of available inventory as compared to last June is continuing to drive our markets, especially in the Goleta and the City of Santa Barbara. 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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