Real estate prices increase as buyers move to Santa Barbara County
Home values have appreciated nationwide during the pandemic — but especially in Santa Barbara County, where people are retreating after living and working in cities.
“I think the pandemic led people to focus on getting out of town,” Brian King, real estate agent at Village Properties, told the News-Press. “People who could afford it focused on Montecito, and it’s almost as though Montecito has been discovered for the umpteenth time.”
The pandemic has brought the 12-month sales volume over a billion dollars in Montecito for the past six or seven months, he said, and it is approaching $2 billion.
“Just Montecito alone, sales over the last 12 month, approaching $1.8 billion is extraordinary,” he said. “It’s a very small area. It’s mind boggling.”
Although the dollar amount is high, the number of houses available in Santa Barbara County is down 50% from March 2020 according to Realtor.com’s residential listings database. So, this year, buyers have half the number of homes to choose from.
And the houses available this year tend to be more expensive. The median list price up 54%, but that doesn’t necessarily mean the same houses have appreciated 54%. It could be that people in less expensive homes are not listing them this year.
A more telling indicator of appreciation is the cost per square foot.
In March, sellers listed their houses at a median of $800 per square foot — up 27% compared to March 2020.
Prior to the pandemic, local real estate was competitive, but it has gotten even stronger.
“There is no indication of a slowdown in the market,” Mr. King said. “Now, I’m not suggesting that in six or nine months time, things are not going to change, but as I’m talking to you, from the end of March, which was two weeks ago, nothing’s changed.”
The housing market tends to heat up in correlation with the weather, but according to Mr. King, there wasn’t much of a slow down this winter.
He held one open house during the pandemic where agents and buyers scheduled a 15-minute time slot. He thought just eight groups would attend but ended up extending the event to almost five hours to accommodate the interest.
“We are in another boom market, but a boom market like no other. People who have been in the business 30 or 40 years have not seen anything like the activity we’re seeing now,” he said.
And interest continues to accelerate.
The proportion of active listings to houses in escrow continues to skew towards more contracts.
In March, mortgage rates went up to 3.08 with .7 points, according to FreddieMac’s 30-year fixed-rate monthly averages. It hit a record low in December with a rate of 2.68 with .7 points.
The low mortgage rates helped coax new buyers into the market in areas suitable for first-time homebuyers while high list prices encouraged sellers to make a move.
“Not any one type of home is selling faster than the other. Everything is selling,” Mr. King said.
When priced appropriately, houses get contracts quickly. The average contract is for list price, he said.
Homes that sold in March were on the market for an average of 82 days.
“Anything that comes on the market at a market price is almost under offer within the week. If not, a few days,” he said.
He sees a trend in people coming from cities to work from home in Santa Barbara.
“Gone are the days when you have to travel 100 miles down to L.A. to go to the office; we’re all working remotely now,” he said.