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
November 14, 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 43% from 172 in October 2021 to 98 in October 2022. In October 2022 there were 70 House/PUD (Planned Unit Development) sales (down 41% from 2021) with a median sales price of $2,024,500 (up 12% from 2021) and an average sales price of $2,904,049 (up 43% from 2021). In October 2022 there were 28 Condominium sales, (down 48% from 2021) with a median sales price of $1,007,500 (up 16% from 2021) and an average sales price of $1,164,364 (up 2% from 2021). Year to date, there were a total of 1,282 residential sales in 2022 (down 33% from 2021), with a median sales price of $1,735,000 (up 16% from 2021) and an average sales price of $2,699,177 (up 10% from 2021).
In Carpinteria, there were a total of 8 residential sales in October 2022, down from 13 in September. In October 2022 the median price of the 3 House/PUD sales was $14,500,000 and the average price was $13,208,333. In October 2022 the median price of the 5 Condominium sales was $775,000 and the average price was $848,400. The lowest-priced Carpinteria sale in October 2022 was a Condominium on Birch Street @ $545,000 and the highest was an Estate on Toro Canyon Park Road @ $21,900,000.
In Summerland, there was only 1 residential sale in October 2022: a house on Shelby Street for $1,515,000. There were no Condominium sales in October 2022.
In Montecito, there were a total of 8 residential sales in October 2022, down from 16 in September. In October 2022 the median price of the 7 House/PUD sales was $3,148,820 and the average price was $4,694,831. In October 2022 the price of the 1 Condominium sale was $5,000,000. The lowest-priced Montecito sale in October 2022 was a House on Alston Road @ $2,300,000 and the highest was an Estate on Toro Canyon Road @ $11,350,000.
In Santa Barbara, there were a total of 55 residential sales in October 2022, up from 52 in September. In October 2022 the median price of the 44 House/PUD sales was $2,024,500 and the average price was $2,368,896. In October 2022 the median price of the 11 Condominium sales was $1,150,000 and the average price was $1,213,016. The lowest-priced Santa Barbara sale in October 2022 was a Condominium on Miramonte Drive @ $630,000 and the highest was a House on Sea Cliff @ $10,000,000.
In Hope Ranch, there were no sales in October 2022.
In Goleta, there were a total of 26 residential sales in October 2022, down from 34 in September. In October 2022 the median price of the 15 House/PUD sales was $1,550,000 and the average price was $1,669,882. In October 2022 the median price of the 11 Condominium sales was $980,000 and the average price was $910,636. The lowest-priced Goleta sale in October 2022 was a Condominium on Moreton Bay Lane @ $329,000 and the highest was an Estate on San Marcos Pass Road @ $3,472,500.
The pandemic has affected our daily lives and how everyone buys and sells real estate. Many Sellers who had avoided listing their homes due to pandemic concerns have moved forward when values increased dramatically and listed their properties for sale, but the inventory of listings for sale remains relatively low. Recently the number of sales in our upper-end market has dropped significantly, which indicates a movement from a Seller’s market to more of a balanced market or to a Buyer’s market. Sales in the Santa Barbara and Goleta markets still remain strong.
All markets are hyper-localized, including the real estate market on the South Coast of Santa Barbara County with its still limited inventory and relatively higher values as compared to many other areas of California and the United States. Focusing on the supply in any market is a good way to anticipate where the markets are heading. Along the South Coast of Santa Barbara County as of November 1st, there were 121 active House/PUD listings (down from 130 in October) and 38 active Condominium listings available (down from 41 in October). Historically there has been more inventory available in the higher price ranges than in the lower ranges; as of November 1st, 26% of the 130 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. Now in 2022, there was a bank-owned sale on Cinderella Lane for $1,205,000 ($50,000 over the list price). Currently, there are no active bank-owned listings for sale on the South Coast, and one listing is pending sale at 421 Fellowship Road @ $1,550,000. There have been very few distress sales due to homeowner equity rising so quickly, allowing them to “bail out” their financially distressed properties, pay off the mortgage, and avoid foreclosure. To check out California’s foreclosure list by County, check out this link: California Foreclosure Trends by County .
“The rapid increase in prices during the COVID-19 pandemic caused many U.S. housing markets to reach completely unaffordable levels for potential local homebuyers. On the West Coast and in Mountain-West states, home prices are slowing from this spring’s high but remain elevated from a year ago. By contrast, markets that continue to see an in-migration of higher-income households are still experiencing home price gains that are notably higher than the national rate of appreciation.” – Selma Hepp Interim Lead, Deputy Chief Economist for CoreLogic
The Federal Reserve (the Fed) had maintained a near-zero rate since early 2020 due to the negative effects on the world economy due to pandemic and supply chain issues. At their November 2, 2022 news conference, Fed Chairman Jerome H. Powell was asked about raising interest rates and he said “We still have some ways to go. At some point, it will become appropriate to slow the pace of increases. So that time is coming, and it may come as soon as the next meeting or the one after that. No decision has been made.” The Fed then raised its benchmark rate substantially by three-quarters of a point for a fourth straight time, the sixth raise in 2022. The Fed’s key rate is now in a range of 3.75% to 4%, the highest it has been in 15 years. Few would disagree that bringing the inflation rate down from its current annual rate of more than 8% is imperative.
Mortgage interest rates have more than doubled since the beginning of 2022, recently marking a 16-year high. As of November 10th, you could lock in a $647,200 30-year fixed-rate loan at 6.625% with a 1% closing fee, down from 6.81% in October. 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 conforming mortgage rate was recorded in 1981 @ 18.63%. As a comparison, a mortgage payment for a $647,200 mortgage in 1981 would have been $10,087/month, the payment in February 2021 would have been $2,608/month, and as of November 10th, the payment would be $4,144/month. According to the Mortgage Bankers Association, mortgage applications have dramatically decreased due to a lack of owners refinancing their properties. Increased mortgage rates have dissuaded many potential buyers from searching for a new home and discouraged some sellers from moving due the low mortgage payments they have locked in on their present home.
Of the 98 sales in October 2022, 81 were over $1,000,000 which equates to 82.6% of the total sales, down from 83% in September. 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 2021 report, 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. Montecito’s 93108 ZIP came in at #7 nationally. https://www.propertyshark.com/Real-Estate-Reports/most-expensive-zip-codes-in-the-us
In October 2022, the National Association of Home Builders housing market index fell nationally for the tenth straight month to 38, down from 46 in September and far below the historical peak of 90 in November 2020. The index is at the lowest level since April 2020 as the combination of elevated interest rates, persistent building material supply chain disruptions and high home prices continue to take a toll on affordability.
According to USA Today, the national average for all-cash real estate sales was 31.4%. On the South Coast in October 2022, 38% of the sales were cash sales, up from 34% in September and up from the 34% Year-to-Date. Review the attached list of the 98 properties sold on the South Coast of Santa Barbara County in October 2022 and/or contact me for information on specific sales.
On June 1st UCLA presented its Economic Outlook which essentially suggests that the economy peaked in January or February and has since slowed down, but it is not in a recession. The Outlook predicts a recession is at least a year away, but maybe as much as 3 years away. To watch the entire Economic Outlook click HERE.
On October 25th the Conference Board reported that the Consumer Confidence Index was 102.5, down from 107.8 in September. 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, at the very start of the pandemic. Historically the highest Consumer Confidence Index level was recorded in September 2000 when the Index stood at 142.5. “Consumer confidence retreated in October, after advancing in August and September,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation Index fell sharply, suggesting economic growth slowed to start Q4. Consumers’ expectations regarding the short-term outlook remained dismal.” To review the full report: https://conference-board.org/data/consumerconfidence.cfm .
As for the worldwide cost of living as of November, Expatistan compiled an index of 225 major metropolitan areas. The cost of gasoline was checked on November 1st. Expatistan’s list indicates that #8 Los Angeles with a 223 Price Index score is the most expensive area in California (a gallon of regular gas costs $5.60) and the least expensive is #70 Modesto with a Price Index score of 143 ($5.35/gallon). In the USA, #2 New York City @ 270 ($3.83/gallon) was the most expensive and the least expensive was #124 Cedar Rapids, Iowa @ 116 ($3.08/gallon). Of the top 25 most expensive areas worldwide, 3 are in California including Los Angeles at #8, #12 San Diego @ 212 ($5.58/gallon), and #17 Irvine @ 191 ($5.47/gallon). The most expensive area to live in the world is #1 Hamilton (Bermuda) @ 282 ($8.80/gallon) and the least expensive is #225 Kharkiv (Ukraine) @ 47 ($5.07/gallon). Santa Barbara is not on the list as Expatistan does not rate it as a major metropolitan area, but local gas prices of $5.58/gallon are similar to other California coastal areas. 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 November 5th, Danielle Hale at realtor.com wrote about national housing trends @ https://www.realtor.com/research/weekly-housing-trends-view-data-week-nov-5-2022/ :
“Already above their 2020 level in October, active listings continued to ratchet higher this week despite the largest year-over-year pullback in new listings since January. The data suggest that it’s not just many buyers, but sellers, too, who are in “wait-and-see” mode. So far, the pullback from potential sellers has nearly matched dwindling buyer interest, and the housing market is resetting but in a slow fashion. The price of the typical for-sale home continues to climb at a double-digit pace, and could finally return to single-digit territory by the end of the year if the recent slowing is sustained. Homes spend more time on the market today compared to last fall and this year’s peak season but continue to sell faster than just about any other prior period even though there are fewer sales. Despite last week’s dip, mortgage rates are expected to climb back above 7% this week and more could be ahead. At the Fed’s November meeting, Chair Powell indicated that future rate hikes will eventually be smaller than 75 basis points. However, he also noted that the Fed funds rate will likely climb higher than the Committee expected in September. Inflation data due out later today could surprise, but if it comes in near recent levels, mortgage rates are more likely to climb than to slip.”
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 October 2022 the median sales price was $1,735,000, down from $1,740,000 in September and up 16% 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 and into 2022. In early 2022 new record-high median sales prices were being set each month but have now leveled off and actually declined slightly. In October 2022 the average South Coast sales price was $2,699,177.
Based on the Santa Barbara Multiple Listing Service data, as of November 1st in the City of Santa Barbara, there were 56 active House/PUD listings (down from 62 in October) and 31 pending sales (down from 40 in October), which equates to a low 1.8-month supply (up from 1.6 in September) of listings for Buyers to choose from. Generally a “one-month supply” would indicate the listings would all be sold within one month. A two-to-four-month supply of inventory would be considered a basic Seller’s market where demand is high and inventory is scarce, a one-to-two-month supply of inventory indicates a heated Seller’s market and a one-month or less supply indicates a feverish Seller’s market. Historically a four-to-six-month supply of available inventory would indicate a fairly well-balanced, normal market between Buyers and Sellers. Typically more than a six-month supply is considered to be a Buyer’s market where inventory is plentiful; Buyers are slower to make decisions and want to compare the properties on the market. Based on Santa Barbara Multiple Listing Service data and as of November 1st, Carpinteria/Summerland had a 3.6-month supply (up from 3 in October), Montecito had a 3.8-month supply (down from 7 in October), Goleta had a 1.2-month supply (up from .8 in October) and Hope Ranch had a 9-month supply (up from 8 in October). These inventory statistics indicate that Goleta and Santa Barbara remain in a heated Seller’s market. Carpinteria/Summerland and Montecito are in a basic Seller’s market. Hope Ranch has entered into a Buyer’s market. With a combined total of 56 House/PUD pending sales (down from 67 in September) and 121 active listings (down from 140 in October) on the South Coast of Santa Barbara County, there is only a 2.2-month supply (up from 1.94 in October) of House/PUD listings from which Buyers can choose. With a combined total of 27 Condominium pending sales (up from 18 in October) and only 38 active listings (down from 41 in October) on the South Coast of Santa Barbara County, there is only a 1.4-month supply (down from 2.3 in October) of Condominium listings from which Buyers can choose. The South Coast market as a whole still remains entrenched in a variety of Seller’s Markets, except for Hope Ranch which has now transitioned into a Buyer’s Market. As the market is in transition, listings are staying on the market longer with fewer multiple offers, but multiple offers still happen. Even with all the negative press, Santa Barbara real estate values have been more resilient to the downward pressures than other parts of the country.
The ramifications of the concerns about the pandemic and how it continues to affect our world, the war in Ukraine, inflation, the cost of gasoline, scarcity of insurance coverage in California or rising premiums, rising mortgage rates, and the possibility of a prolonged recession are all concerns to many Buyers, and Sellers. Since Proposition 19 has taken full effect, 55+ year-old homeowners can transfer their existing real estate tax base to a home anywhere in California, which should encourage some sellers to list their homes. Mortgage interest rates have risen lately and are nowhere near the historic historical lows of the last few years. Low inventory and accelerated pandemic migratory trends toward smaller cities all led to a surge in Santa Barbara property values. Market corrections will affect values on the South Coast of Santa Barbara, but not as much as in many other areas. With continuing low inventory, 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