How is The Santa Barbara Real Estate Market 2019?
Buying real estate in California can be a worthy investment opportunity. If you are looking at investing in the Santa Barbara real estate market in 2019 as a potential investment opportunity, you must read till the end. Say Santa Barbara, and the first thing most people think about are the beaches.
That’s understandable given the city is nicknamed America’s Riviera. This area has evolved from a sleeping California coastal town to an upscale beach community notable for its local wineries and mission architecture. Santa Barbara is home to nearly a hundred thousand people.
The Santa Barbara housing market is much larger than this, since the metro area includes the Santa Ynez and Santa Maria Valleys. This means the Santa Barbara real estate market includes almost half a million people. The Santa Barbara has a temperate climate year-round, making it popular with tourists and water sports year round.
The city is close to Montecito, Goleta and Summerland and part of the California South Coast. The city officially covers 3800 square miles because it includes four of the five Channel Islands. Is Santa Barbara going to be one of the hottest real estate markets for investors in 2019? Let’s take a deep look at the latest Santa Barbara housing market trends to come to a conclusion.
Santa Barbara Real Estate Market Forecasts 2019 & 2020
The real estate data from Zillow shows that the median home value in Santa Barbara is $1,139,700. Santa Barbara home values have declined -2.6% over the past year and Zillow's Santa Barbara real estate market prediction is that the prices will fall -2.8% within the next year. The median list price per square foot in Santa Barbara is $773, which is higher than the Santa Maria-Santa Barbara Metro average of $553.
The median price of homes currently listed in Santa Barbara is $1,299,000 while the median price of homes that sold is $1,053,100. The median rent price in Santa Barbara is $4,650, which is higher than the Santa Maria-Santa Barbara Metro median of $4,000.
Here is the Santa Barbara, CA real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of -2.8% till July 2020.
Santa Barbara Housing Market Forecast 2019 – 2021
The Santa Barbara housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Santa Barbara housing market trend prediction is 76%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in Santa Barbara, CA is 76% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Santa Barbara, CA Real Estate Forecast.
Santa Barbara Real Estate Market Trends
Let us find out how is the Santa Barbara real estate market doing in 2019. According to Trulia, Santa Barbara real estate market trends indicate an increase of $23,000 (2%) in median home sales and a -2% drop in median rent per month over the past year. The average price per square foot for this same period rose to $714, up from $707. Trulia has 680 resale and new homes for sale in Santa Barbara, CA, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
The median sales price for homes in Santa Barbara for May 1 to Jul 31 was $1,125,500 based on 286 home sales. Average price per square foot for Santa Barbara was $714, an increase of 1% compared to the same period last year. The median rent per month for apartments in Santa Barbara for Jul 6 to Aug 6 was $4,397.
Santa Barbara real estate data by Redfin.com shows that the Santa Barbara housing market is somewhat competitive. Homes in Santa Barbara receive 1 offers on average and sell in around 45 days. The average sale price of a home in Santa Barbara was $1.17M last month, up 14.6% since last year.
The average sale price per square foot in Santa Barbara is $680, up 2.3% since last year. Homes typically receive 1 offer. Homes in the Santa Barbara housing market sell for about 2% below list price and go pending in around 45 days. Hot homes for sale in Santa Barbara, CA can sell for around list price and go pending in around 21 days.
Santa Barbara Housing Market Statistics
|Median Sales Price||$1,125,500 (On Trulia)|
|Price Per Square Ft||$714|
|Median Rent Per Month||$4,397|
|Median Household Income||$75,592|
|Transportation||90% people commute by car; 2% commute by public transportation|
There are 720 homes for sale in Santa Barbara, CA ranging from $125K to $75M on Realtor.com. 51 of which were newly listed within the last week. Additionally, there are 232 Santa Barbara rentals for sale, with a range of $250 to $100K per month. According to Realtor.com, in July 2019, the housing market in Santa Barbara, CA was a buyer's market, which means there were roughly more active homes for sale than there were buyers.
In July 2019, the median list price of homes in Santa Barbara, CA was $1.5M, trending up 7.8% year-over-year. The median listing price per square foot was $753. The median sale price was $1.9M. On average, homes in Santa Barbara, CA sell after 53 days on the market. The trend for median days on market in Santa Barbara, CA has gone down since last month, and slightly down since last year.
The median list price in Santa Barbara, CA is $1,991,500 on Movoto.com. The median list price in Santa Barbara was less than 1% change from August to September. Santa Barbara's home resale inventories is 416, which increased 0 percent since August 2019. The median list price per square foot in Santa Barbara is $844. August 2019 was $844. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in September.
Santa Barbara, CA Single Family And Multi-Family Homes
Following the real estate market decline in 2007 in the U.S., single family rental homes became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate.
Single family rental properties have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
As per the real estate company called Neigborhoodscout.com, the median house price in Santa Barbara, CA is $1,142,553, which indicates that home prices in Santa Barbara are well above the national average for all cities and towns in the United States. In fact, the Santa Barbara home prices are some of the most expensive in all of the U.S. housing market.
Single-family detached homes are the single most common housing type in Santa Barbara, accounting for 47.86% of the city's housing units. Small one or two bedroom single-family detached homes are the most common housing units found in Santa Barbara, CA.
Other types of housing that are prevalent in Santa Barbara include large apartment complexes, duplexes, homes converted to apartments and a few row houses. Santa Barbara has a mixture of owner-occupied and renter-occupied housing.
Currently, there are 219 single family homes for sale in Santa Barbara, CA on Zillow. Additionally, there are 121 single family homes for rent in Santa Barbara, CA. Under potential listings, there are about 0 Foreclosed and 31 Pre-Foreclosure homes. These are the properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
Santa Barbara, CA Foreclosures And Bank Owned Homes 2019
As per the Santa Barbara foreclosure data by Zillow, the percent of delinquent mortgages in Santa Barbara is 0.5%, which is lower than the national value of 1.1%.
With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth.
The percent of Santa Barbara homeowners underwater on their mortgage is 2.7%, which is lower than Santa Maria-Santa Barbara Metro at 6.4%.
|Foreclosures in Santa Barbara||50|
|Homes for Sale in Santa Barbara||350 (RealtyTrac)|
|Median List Price||$1,475,000 (7% ⇑ vs Jun 2018)|
There are currently 50 properties in Santa Barbara, CA that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 350. In July 2019, the number of properties that received a foreclosure filing in Santa Barbara, CA was 225% higher than the previous month and 8% higher than the same time last year.
Best Places To Buy Santa Barbara Rentals
If you are looking to buy Santa Barbara rentals, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your Santa Barbara rental real estate and you should be able flip it for a lump sum profit.
When looking to invest in Santa Barbara real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an Santa Barbara investment property should be low. The neighborhoods in Santa Barbara must be safe to live in and should have a low crime rate.
The neighborhoods should be close to basic amenities, public services and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. There are 34 elementary schools, 13 middle schools, 9 high schools and 35 private & charter schools. There are 39 neighborhoods in Santa Barbara.
Some of the best neighborhoods in Santa Barbara, California are Alta Mesa, Riviera and Hope Ranch. Hope Ranch has a median listing price of $4.1M, making it the most expensive neighborhood. Oak Park is the most affordable neighborhood in Santa Barbara, with a median listing price of $749,000.
Here are the best neighborhoods to invest in Santa Barbara rentals because they have the highest appreciation rates (List by Neigborhoodscout.com).
Shoreline Dr / San Rafael Ave
City Center / Antioch U-Santa Barbara
De La Vina St / W Micheltorena St
Hollister Ave / S Turnpike Rd
Loma Alta Dr / Cliff Dr
N Milpas St / E Montecito St
Cliff Dr / Meigs Rd
N La Cumbre Rd / State St
E Cabrillo Blvd / S Milpas St
Should You Invest In Santa Barbara Rental Real Estate?
Now that you know where Santa Barbara is, you probably want to know why we’re recommending it to real estate investors. Is it worth buying a house in Santa Barbara, CA? Investing in real estate is touted as a great way to become wealthy.
Many real estate investors have asked themselves if buying a rental property in Santa Barbara is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the Santa Barbara housing market 2019 forecast for answers on why to put resources into this market. Although, this article alone is not a comprehensive source to make a final investment decision for Santa Barbara but we have collected ten evidence based positive things for those who are keen to invest in the Santa Barbara rentals in 2019.
Investing in Santa Barbara rentals will fetch you good returns in the long term as the home prices in Santa Barbara have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Santa Barbara real estate market which can help investors who are keen to buy an investment property in this city.
1. The Geography
Santa Barbara is sandwiched between the Santa Ynez Mountains and the Pacific Ocean. On one hand, it means everyone is either close to the ocean or probably has a good view of it. Conversely, it means flat land is limited and incredibly expensive.
Building on the hills is limited due to the risk of landslides. All of this results in high real estate prices. Roughly a quarter of all homes in the Santa Barbara housing market are worth two million dollars or more.
You can find a Santa Barbara real estate investment for less than a quarter million dollars, but it will be a small condo or a bungalow.
2. The Limits on Development in Rural Areas
Santa Barbara wine country is often ignored in favor of the more famous Napa Valley. However, this is a rich agricultural region.
The county has taken steps to preserve that rural character to the point of making it hard to open a new winery in the area. That certainly prevents new home construction on current farmland.
Then there are the hard limits on development, such as the fact you can’t build in the Los Padres National forest. This will contribute to continued appreciation of Santa Barbara real estate investment in rural or urbanized areas.
3. The High Housing Density
The Santa Barbara real estate market is notable for its density. There are already 2000 houses per square mile in the Santa Barbara housing market. For comparison, the national average is more like 40, while the Los Angeles area has roughly 200 homes per square mile.
This means that the supply of beachfront condos for Santa Barbara real estate investment is high, and it will result in incredibly high prices for any old condos or homes torn down for redevelopment. These are generally half million dollar bungalows replaced by one to three million dollar luxury homes.
4. The Tourism Market
The beaches and watersports attract millions of people every year to the area. So do the more than one hundred wineries in the mountains. One study suggested well over seven million people visit the area in a given year.
Dining, going to the beach, hitting local cultural events, dropping by a wine-tasting and shopping are their most common activities. Roughly two in five are making a day trip or weekend trip from the Los Angeles metro area.
Note that Santa Barbara real estate investment properties cannot be offered as short term rentals unless you secure the necessary permits. Most of these are only allowed in areas zoned for hotels.
5. The Relatively Landlord Friendly Jurisdiction
California state law is tenant friendly. Individual cities can take things even further. Yet cities like Santa Barbara have been slow to move in that direction, providing more support for property owners. For example, Santa Barbara only recently passed rules that limit the reasons landlords can evict a tenant.
There is no city-level rent control to limit the rental rate increases of a Santa Barbara real estate investment property like the one Los Angeles passed. The city has rejected measures that would require annual leases to tenants.
6. The Relatively Decent Property Tax Rate
The Santa Barbara real estate market subjects you to California’s high income tax rate. However, property tax rates are a relative bargain. The property tax rate averages 0.5 percent of the property’s value.
The high cost of property in the Santa Barbara housing market results in a roughly three thousand dollar a year property tax bill, but that should be compared to the cost of a similarly priced beachfront home in L.A., not a single family home in the Inland Empire.
The Santa Barbara housing market is often ranked among the worst for property taxes as a percentage of resident’s average income, but that’s just one more reason why so many locals rent.
7. The Massive Rental Market
More than half of all residents in the Santa Barbara housing market rent. This is often the result of economics. The average wage is 50K, while the average home hovers around half a million dollars.
Demand for rentals is so high that young professionals are leaving for cheaper markets, mostly inland. Others double up or live with parents because they want to remain in the area.
Only nearby Isla Vista, a community consisting nearly entirely of college dorms for the University of Santa Barbara has a greater share of renters in the population.
8. The Large College Market
The neighborhood of Isla Vista serves students attending either Santa Barbara City College or the University of California Santa Barbara campus. The city college is a community college with nearly twenty thousand students, while USCB hosts more than twenty thousand.
Antioch University Santa Barbara and Fielding Graduate University have several hundred students each, as well. This means a Santa Barbara real estate investment portfolio could be diversified by serving students, tourists and locals.
9. The Better Quality of Life
All politics are local, and local decisions can have a major impact on quality of life. For example, San Francisco decided that it is oppressive to crack down on homelessness, drug use and crime.
The results of these decisions include people paid nearly 200K a year to remove human poop from the streets, poop apps that suggest the entire city is covered in it, and straw bans while they have hypodermic needles in the street.
These horror stories make the news. However, not all of California is like that. The Santa Barbara real estate market isn’t seeing flight of families afraid of crime, disease and other third world horrors. They’re just struggling with the price of real estate.
The area is seeing some younger adults move out, but others are moving in for the far better quality of life. That will prevent the Santa Barbara real estate market from depreciating the way San Francisco will collapse when Big Tech firms can’t convince people to live in a box and risk stepping on poop and needles on their way to the bus for 100K plus a year in pay.
10. The Decent Rate of Return
The rental rates in the Santa Barbara real estate market are much higher than the national average. The median rent was 1500 dollars a month around 2016, though that includes studio apartments.
In 2019, the average rent for an apartment passed 2000 dollars a month. Rental rates are increasingly roughly seven percent a year. Property values in the Santa Barbara housing market are going up about as fast.
Santa Barbara Real Estate Investment
Maybe you have done a bit of real estate investing in Santa Barbara, California but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold.
A good cash flow means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good Santa Barbara real estate investment opportunity would be a key to your success. in If you invest wisely in Santa Barbara rental real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
The less expensive the Santa Barbara rentals are, the lower your ongoing expenses will be. Roughly a $150,000 property is what some experts recommend starting with. However, it is not easy to get that kind of a deal in Santa Barbara as it is among the most expensive real estate markets in the U.S.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments in Santa Barbara, you should focus on neighborhoods with relatively high population density and employment growth.
Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Santa Barbara, CA. The Santa Barbara area is a textbook case of limited supply and high demand driving up the cost of renting and owning in the area.
Residents enjoy a higher quality of life, while property owners face lower taxes and less regulation. That makes the Santa Barbara real estate market one of the best choices for those considering investing in a California coastal community. If you are a real estate investor, Santa Barbara has a track record of being one of the best long term real estate investments in the country.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process.
They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Santa Barbara real estate in 2019. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Best Places To Invest in Real Estate in 2019
Another sizzling market to choose for investment is Midland, Texas. Midland, Texas is in the middle of a sustained boom, though it retains its small town charm.
However, that’s leading to double digit increases in rent and property values at all price levels that won’t be stopping any time soon. This makes Midland real estate a great opportunity for investors.
Also, the value of a Midland TX real estate investment property is certain to remain stable for one reason – demographic momentum. The average age of Midland residents is 32, eight years younger than the national average.
The other best place to invest in real estate is Wenatchee, WA. The Wenatchee housing market doesn’t offer double digit appreciation or brand name recognition. For example, you can’t say you’re investing in Silicon Valley real estate.
However, the returns are no less than what you can expect is such competitive markets. Despite a nationwide downturn in the housing market, Wenatchee real estate has continued to appreciate year-over-year.
Based on the last twelve months, short-term real estate investors have found good returns in Wenatchee. Wenatchee appreciation rates in the latest quarter were at 1.20%.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here.
One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
About Santa Barbara
Relatively landlord friendly
Massive rental market
The relatively low tax rate
Limits on development
Quality of life
Housing Market Data, Trends & Statistics