Santa Barbara's Real Estate Market In A Nutshell

2020 is known for a lot of things, but a record-breaking year for real estate is certainly one of its more unexpected legacies. What most of us expected to be a disaster for the housing market actually turned out to be quite the gold mine; and depending on whether you’re a buyer or a seller, the Golden State is just the perfect place for you. As you’ll come to learn, Santa Barbara’s real estate market is currently more of a seller’s market, but don’t be disheartened; this doesn’t mean there aren’t creative ways to acquire your dream home. 

Overview of Santa Barbara’s Housing Market

Rather than causing a slowdown, 2020 surprisingly left Santa Barbara’s housing market more robust than ever. Experts predicted that those favorable conditions would effortlessly flow over into the new year—and they were right. Home prices did continuously rise due to limited inventory, but the interest rates were S.B. 's saving grace.

Market conditions such as fewer available listings, ever-changing criteria for desired homes, and record-breakingly low mortgage rates are designing a new way people purchase and sell homes—a practice that’s most likely here for the long run. And the fact that Santa Barbara’s real estate market showed no signs of slowing down, even in the uncertainty of 2020, only proved that homebuying was still viewed as a sound investment. The only question left for Santa Barbara buyers to understand is taking advantage of the new normal housing market.

Santa Barbara Real Estate Trends 

Low Inventory Crowns Santa Barbara ‘A Seller’s Market’

Inventory (the number of homes for sale) is at a record low in Santa Barbara—as well as everywhere in the Golden State. Currently, that totals to about 1.47 million units. This is a 19.2 percent decline from one year ago and is lower than the inventory from 1982 onward.

If you’re a buyer, don’t let this discourage you—experts do foresee a little relief on the horizon. Inventory is, slowly but surely, on the rise, with beautiful homes popping up seemingly out of nowhere. But, as of today, the fact still remains—Santa Barbara is a seller’s world. Here are a few reasons why:

• For one, the limited amount of property burgers buyers to act fast—a real treat in a seller’s book. Most houses that go on the market end up staying for an average of just 21 days before being sold.
• Another perk for sellers is the higher net returns on their listings. This is obviously garnered by the high-stakes competition for the property available, making bidding wars not an uncommon practice.
• Deeming Santa Barbara a seller’s market as a simple byproduct of the pandemic is also an over-simplification. There are other reasons, such as the fact that the country’s top 100 metro markets have been witnessing dwindling inventory since the first quarter of 2020 when the pandemic was not yet a thing.

If you’re a seller trying to properly adjust to Santa Barbara’s real estate trends, then you should know that buyers are hungry right now. They will spend a significant amount of money to purchase property; much more than they would last year. So, if there was ever a good time to list for top dollar, 2021 seems to be written in the stars.

If you’re a buyer, however, you’re going to have to learn how to survive in a seller’s market. This means bidding wars, getting your finances in order, being pre-approved, and learning how to stand out amid the competition. But, thankfully, there are highly qualified real estate professionals in the Santa Barbara area, and buyers, they will be your saviors.

Benefits for Homebuyers 

Okay, we sense that we may have painted a bit of a pessimistic picture for the buyers out there. Worry not, because the “new normal” has plenty of benefits for homebuyers as well. For instance, people used to base their purchases on how far their commute was going to be to work. Now, in the new era of remote work, the locus has largely shifted. Nowadays, people are freer to choose where their forever home is going to be, without the restraints of proximity. And this often equates to more space needed in different types of areas—quieter neighborhoods, extra bedrooms to convert to home offices, access to the great outdoors, etc. Given this, many buyers are looking at homes outside of the American Riviera, which has helped eliminate a significant amount of competition.

Another advantage is, of course, the record-low mortgage rates. In fact, the rates have been the lowest since 1971, allowing buyers to purchase a home that costs roughly $32,000 more while keeping their monthly payments the same.

Average House Price in Santa Barbara 

The median Santa Barbara house prices are estimated to be around $1,468,000. The most popular types of property include single-family homes, townhomes, condominiums, and co-ops— the sales for which have risen by 9.4 percent since September 2020 and seasonally adjusted to an annual amount of 6.54 million dollars. That’s about a 21 percent increase from just one year ago.

Santa Barbara Rental Market

The average Santa Barbara rental housing price is approximately $2,283—an eight percent increase compared to the previous year which had an average of $2,108. If you’re looking to rent, then you should know the average size of an S.B. apartment is approximately 658 square feet, but this number varies greatly depending on the type of unit you’re renting. Studio apartments are the smallest yet most affordable, one-bedroom apartments are closer to the average, and two and three-bedroom apartments are more generous in their square footage and pricing as well.

Santa Barbara’s Most Affordable Neighborhoods

Santa Barbara’s most affordable neighborhoods to rent in are East San Roque, Foothill, Samarkand, and Hitchock—all boasting an average rent of $2,000 per month. Other great deals can be found in Cielito ($2,035) as well as the greater San Roque area.