Real Estate Market in Santa Barbara
Santa Barbara real estate market overview
Over the last decade, the Santa Barbara real estate market has seen a record rise in property prices. As a consequence, Santa Barbara real estate has become a premium item. Despite the sharp rise in prices, demand remains strong and should drive future development. It seems that today's high prices aren't deterring purchasers, raising the question, "Is Santa Barbara real estate a smart investment?"
Santa Barbara Real Estate market in numbers
- Median Home Value – $1,751,365
- New Listings – 302
- Active Listings – 350
- Median List Price – $2,100,000
- Homes Sold – 262
- Median Rent – $2,401
- Price-To-Rent Ratio – 60.71
Santa Barbara Real Estate market trends
Many of the Santa Barbara real estate market changes that will occur in 2022 are reflections of broader national patterns. If nothing else, the epidemic has transformed how real estate markets function and Santa Barbara real estate is no different. With that in mind, here's a short rundown of the current trends in Santa Barbara:
Trends in Home Prices
Home prices in Santa Barbara, like everywhere else, are skyrocketing. Because of supply and demand restrictions, house prices have risen over 50% since the epidemic began. Home prices are now testing new highs each month in 2022. Prices will continue to climb in the future, but at a slower rate.
Trends in Investing
Santa Barbara real estate investors, like purchasers, will rush to lock in low-interest rates before they rise too high. Many will turn to rental homes since rates will help investors offset increased prices while also increasing cash flow. Having stated that, the opportunity is closing. Interest rates will rise to excessively high levels, but in the meanwhile, rental properties seem to be an excellent investment opportunity.
Trends in Supply
The Santa Barbara real estate market has around two weeks of inventory with a total of 348 active listings year to date. Supply is significantly inadequate, with balanced markets displaying upwards of six months of inventories. There aren't nearly enough properties to meet demand. Thus the Santa Barbara property market is highly skewed against sellers. Because of supply and demand limits, prices have risen sharply and will continue to rise as long as buyers stay active.
Investing in Santa Barbara real estate
Since the Great Recession, the Santa Barbara real estate investment community has done well for itself. Rehabbers have become used to profit margins that are fueled by demand and appreciation. However, the same price rises that have benefited Santa Barbara real estate investors for the last ten years are now pushing them to reconsider their methods.
In one of the most expensive states, Santa Barbara is one of the fastest appreciating markets. Indeed, the city's recent surge has transformed the local real estate market into a hotspot dominated by luxury house sales throughout the epidemic.
Here are a few new Santa Barbara real estate market trends that may benefit rental property investors:
- Traditional loan interest rates are still quite low.
- Years of cash flow readily compensate for today's greater purchase expenses.
- Rental demand will rise due to inventory limitations.