Santa Barbara Real Estate Market Report | February 2026

SANTA BARBARA REAL ESTATE OVERVIEW

February’s data continues to highlight how significantly the luxury segment influences overall price metrics across South Santa Barbara County.

A decline in luxury home sales, particularly in Montecito, contributed to a noticeable drop in both average and median sale prices. Year-to-date, 21 properties have sold in Montecito, representing a 54% decline compared to 46 sales at this time last year.

This reduction in high-end transactions continues to skew overall pricing downward.

However, this does not reflect broad-based market weakness. Outside of the luxury segment, activity remains steady, with a notable shift toward more attainable price points. Condominium sales, in particular, are up significantly, signaling continued demand from buyers seeking relative value.

As a result, the decline in headline pricing metrics appears to be driven primarily by composition of sales, rather than a widespread erosion in property values.

KELLY’S MARKET PERSPECTIVE

What we are seeing is a market recalibrating, not retreating.

Luxury activity, especially in Montecito, has slowed meaningfully to start the year, which disproportionately impacts regional averages. At the same time, buyer demand remains present and active in the entry-level and mid-market segments.

Buyers are more deliberate today. Insurance availability, property condition, and long-term ownership costs are playing a larger role in decision-making. Homes that are well prepared and priced appropriately continue to generate strong interest and, in many cases, competitive dynamics.

BUYER DEMAND SHIFTS TOWARD ENTRY-LEVEL HOMES

Comparing February 2026 to February 2025, buyer activity has clearly shifted away from the luxury segment, while demand for condos and more accessible price points has increased.

Sales Activity

• Total Sales: 107 (Up 5%)
• Single-Family Sales: 71 (Down 7%)
• Condo Sales: 36 (Up 38%)

The increase in total sales, driven largely by condominium activity, reflects continued market participation despite broader economic uncertainty.

YEAR-OVER-YEAR PRICING BREAKDOWN

Single-Family Homes

• Average Price: $2,960,214 (Down 15%)
• Median Price: $1,975,000 (Down 26%)

Condos and Townhomes

• Average Price: $1,328,472 (Down 14%)
• Median Price: $1,122,500 (Down 23%)

These pricing shifts are consistent with a market experiencing fewer luxury transactions rather than uniform price declines across all segments.

INVENTORY AND BUYER DYNAMICS

Months of Inventory: 2.99 months of supply, essentially flat month-over-month.

Cash Buyers: 44% of February transactions were all-cash purchases, reinforcing the continued strength of well-capitalized buyers.

Average Days on Market:

• Single-Family: 38 days
• Condo/PUD: 31 days

Taken together, these metrics point to a market that remains active, though more measured and selective.

YEAR-TO-DATE CONTEXT (JANUARY–FEBRUARY 2026)

Looking beyond a single month provides additional clarity.

Year-to-date, total sales are 196 transactions, down just 2% year-over-year, indicating relatively stable overall activity.

However, pricing reflects the same luxury slowdown:

• Average Sale Price: $2,466,242 (Down 28%)
• Median Sale Price: $1,675,000 (Down 16%)

Single-family activity has softened modestly, while condominium sales have increased, reinforcing the shift toward more accessible price points.

Cash purchases remain elevated at 42% of all year-to-date transactions.

FINAL TAKEAWAYS | BEYOND THE NUMBERS

The Santa Barbara market is entering 2026 in a transitional but stable position.

Luxury sales volume, particularly in Montecito, is down significantly, which is impacting headline pricing data. At the same time, underlying demand remains intact, especially in the entry-level and mid-market segments.

Buyers are approaching the market with greater discipline, placing increased emphasis on condition, long-term cost of ownership, and overall value. For sellers, thoughtful preparation and strategic pricing remain the keys to achieving strong results.

PLANNING AHEAD

Every market cycle creates opportunity for those who are prepared.

As we move into the spring market, we expect inventory to build gradually while buyer activity remains steady but selective, particularly in well-priced and well-prepared homes. The next several months will likely reward sellers who align pricing with current market conditions and present their homes thoughtfully from day one.

At Knight Real Estate Group, we bring more than two decades of experience navigating both strong and shifting markets. Our role is to help sellers position their homes strategically while guiding buyers toward opportunities that align with long-term value.

If you are considering a move, or simply want a clear understanding of your home’s position in today’s market, we are always available to provide thoughtful, data-driven guidance.

Disclaimer: This report is based on available data and market trends as of 2/28/26. Actual market conditions may vary, and individuals are encouraged to consult with real estate professionals for personalized advice.

Santa Barbara Real Estate Market Report | January 2026

SANTA BARBARA REAL ESTATE OVERVIEW

January’s data highlights how significantly the luxury segment can influence overall price metrics in South Santa Barbara County.

A notable decline in luxury home sales led to a sharp drop in both the region’s average and median sale prices. This shift was driven largely by reduced activity in Montecito.

In January 2026, nine properties sold in Montecito, representing a 65% decline in sales volume compared to January 2025, when 26 transactions closed. This marks the fewest January sales in Montecito since 2018, which also recorded nine sales.

Importantly, this does not signal broad weakness across the market. Outside of the luxury segment, both sales activity and pricing remained relatively stable, reflecting steady demand for the majority of properties.

As a result, the decline in headline price statistics appears to be driven primarily by fewer high-end transactions rather than a widespread softening in home values.

KELLY’S MARKET PERSPECTIVE

While January’s headline numbers show a sharp year-over-year decline in prices, the shift is largely statistical rather than structural. Montecito’s luxury market had significantly fewer closings this January, which heavily influences regional averages.

Across most price points, buyer demand remains steady, though more selective. Buyers are paying closer attention to insurance availability, natural hazard exposure, and overall property condition. Homes that are thoughtfully prepared and realistically priced continue to attract the strongest interest.

BUYER DEMAND SHIFTS TOWARD ENTRY-LEVEL HOMES

Comparing January 2026 to January 2025, buyer activity shifted toward the non-luxury segment of the market. Both single-family and condominium pricing softened year-over-year.

Sales Activity
Total Sales: 90 (Down 8%)
Single-Family Sales: 64 (Down 7%)
Condo Sales: 26 (Down 7%)

YEAR-OVER-YEAR PRICING BREAKDOWN

Single-Family Homes
Average Price: $3,078,168 (Down 36%)
Median Price: $2,300,716 (Down 20%)

Condos and Townhomes
Average Price: $1,118,481 (Down 29%)
Median Price: $862,500 (Down 14%)

INVENTORY AND BUYER DYNAMICS

Months of Inventory increased slightly to 3.04 months of supply, marking the first increase since September 2025. Cash buyers accounted for 39% of January’s transactions, underscoring the continued influence of well-capitalized purchasers in the Santa Barbara market.

FINAL TAKEAWAYS | BEYOND THE NUMBERS

Since the 2025 Los Angeles fires, buyers have become increasingly attentive to natural hazard exposure, particularly in foothill neighborhoods with elevated fire risk. Insurance availability and cost have become more prominent factors in purchasing decisions.

For homeowners considering a move within the next three to five years, proactive preparation can make a meaningful difference in both marketability and value. Investments in major systems such as roofing, HVAC, drainage, and overall maintenance are increasingly important as insurance carriers place greater scrutiny on property condition and roof age.

PLANNING AHEAD

Every market cycle creates opportunities for those who are prepared. At Knight Real Estate Group, we bring more than two decades of experience navigating both strong and transitional markets. Our focus is helping sellers position their homes strategically while guiding buyers toward opportunities that align with long-term value.

If you are considering a move or would simply like perspective on your home’s position in today’s market, we are always happy to share insights.

Disclaimer: This report is based on available data and market trends as of 1/31/26. Actual market conditions may vary, and individuals are encouraged to consult with real estate professionals for personalized advice.

Santa Barbara Real Estate Market Report | December 2025

SANTA BARBARA REAL ESTATE OVERVIEW

2025 was a bumpy and transitional year for California real estate, shaped by wildfire impacts, global economic uncertainty (including tariff concerns), and an extended period of higher interest rates. Yet, as the year progressed and the market adjusted to the “new normal,” South Santa Barbara County continued to demonstrate remarkable resilience. Transaction volume increased by double digits, pricing rose at a measured pace, and inventory ended the year on a declining trend.

December data adds an important layer to the story: while overall sales remained strong, buyer demand shifted away from the mid and upper tiers and concentrated more heavily in entry-level single-family homes and condominiums. This pattern is consistent with year-end seasonality and signals that affordability and value were top-of-mind for buyers heading into 2026.

2025 YEAR IN REVIEW: STEADY GROWTH IN SALES AND PRICING

On a year-over-year basis, South Santa Barbara County posted meaningful gains in overall activity.

Total Sales Volume: 1,365 closed transactions (+11%)
Pricing remained historically strong across all residential segments, with both average and median values continuing to trend upward.

Single-Family Homes (YTD 2025)

• Average Price: $3,640,015 (+4%)
• Median Price: $2,300,000 (+6%)

Condos & Townhomes (YTD 2025)

• Average Price: $1,368,734 (+8%)
• Median Price: $1,093,000 (+10%)

Pricing remains near all-time highs, with both year-to-date average and median prices registering 35-year highs, underscoring the long-term strength and desirability of the Santa Barbara lifestyle market.

DECEMBER 2025: BUYER DEMAND SHIFTS TOWARD ENTRY-LEVEL MARKET

Comparing December 2025 to December 2024 reveals a notable change in buyer activity and pricing dynamics. Total sales increased modestly, but the composition of demand shifted toward more affordable homes and condos.

• Total Sales: 102 (+5%)
• Single-Family Sales: 70 (0%)
• Condo Sales: 32 (+19%)

December Pricing Breakdown

Single-Family Homes

• Average Price: $2,564,531 (–12%)
• Median Price: $1,919,993 (–5%)

Condos & Townhomes

• Average Price: $1,298,358 (+22%)
• Median Price: $1,075,000 (+20%)

This contrast suggests a clear December tilt toward affordability and value, with strong demand for entry-level homes and condos, while higher-priced single-family activity cooled.

INVENTORY & BUYER DYNAMICS

Inventory ended the year on a tightening trend:

• Months of Inventory: Declined for the fifth time in 2025 and the fourth consecutive month, ending December at 2.59 months

This decline likely reflects a mix of seasonal listing patterns, improved financing conditions, and equity-market strength. As sellers pulled back for the holidays, motivated buyers moved quickly on well-positioned opportunities.

• Cash Buyers: 33% of December transactions, below the rolling 12-month average of 38%

The dip in cash share aligns with December’s shift toward entry-level activity, where financed purchases tend to represent a larger portion of demand.

FINAL TAKEAWAYS | BEYOND THE NUMBERS

Equity markets posted meaningful gains in 2025, driven largely by momentum in the AI sector and strong corporate performance. Those gains helped support activity at the high end ($6M+), while the entry-level segment (under $3M) remained consistently resilient throughout the year. December’s pricing data suggests a short-term pivot away from luxury sales and toward affordability, which will be important to monitor as we enter early 2026.

At the same time, buyer psychology has continued to evolve. Since the Los Angeles fires, natural hazard exposure has become a more prominent decision factor, especially in higher fire-risk zones. Insurance availability, premium volatility, and underwriting standards are increasingly shaping buyer demand and value perception in foothill neighborhoods.
For homeowners considering a sale in the next three to five years, proactive preparation remains one of the most effective ways to drive value. Improvements such as roof replacement, HVAC upgrades, drainage work, and general maintenance are increasingly important, particularly as insurance carriers place greater weight on roof age and property condition.

At Knight Real Estate Group, we bring over 20 years of experience navigating both strong and transitional markets. We understand how to position properties effectively and help buyers identify value as conditions evolve. Whether you are buying, selling, or planning ahead, we’re here to guide you with data, perspective, and results.

Disclaimer: This report is based on available data and market trends as of 12/31/25. Actual market conditions may vary, and individuals are encouraged to consult with real estate professionals for personalized advice.

Santa Barbara Real Estate Market Report | November 2025

SANTA BARBARA REAL ESTATE UPDATE

The Santa Barbara real estate market continues to show strong performance following a slower and more uncertain summer. Transaction volume is up double digits compared to last year, inventory supply declined for the second consecutive month, and prices continue to grow at a measured, sustainable pace.

As the holidays approach, seasonal patterns are beginning to emerge. Many sellers are opting to wait until the new year to bring homes to market, while some buyers are pausing their searches. Even so, demand remains steady, particularly for well-priced, move-in-ready properties.

NOVEMBER 2025 OVERVIEW: STRONG YEAR-OVER-YEAR ACTIVITY

On a year-over-year basis, the residential market posted notable gains in November. Total sales volume increased 17%, with 108 transactions closed during the month.

YEAR-TO-DATE PRICING TRENDS REMAIN AT HISTORIC HIGHS

Looking at year-to-date performance through November, both average and median pricing increased across all property types:

Single-Family Homes
Average Price: $3,717,834 (+4%)
Median Price: $2,357,500 (+7%)

Condos & Townhomes
Average Price: $1,375,457 (+7%)
Median Price: $1,098,000 (+10%)

Both average and median prices are now registering 35-year highs, underscoring the long-term strength of the South Santa Barbara County market despite near-term volatility.

INVENTORY & BUYER DYNAMICS

Months of Inventory Supply:
Inventory declined for the third time this year and the second month in a row, falling to 3.11 months. This tightening is being driven by a combination of lower interest rates, strong equity market performance, and a seasonal slowdown in new listings as sellers shift their focus to the holidays.

Cash Buyers:
Cash purchases accounted for 39% of all November transactions, reinforcing the continued influence of equity-driven buyers in today’s market.

FINAL TAKEAWAYS | BEYOND THE NUMBERS

Equity markets have posted substantial gains in 2025, driven in large part by momentum in the AI sector. These gains have supported continued activity in the upper end of the housing market ($6M+), while the entry-level segment (under $3M) has remained notably resilient.

Since the January LA fires, buyers have shown a clear preference for properties with lower exposure to natural hazards. Ongoing insurance challenges have further softened demand in foothill and high-fire-risk areas, where coverage availability and premiums remain a concern.

For homeowners considering a sale within the next three to five years, thoughtful preparation can deliver both immediate value and long-term returns. System upgrades such as roof replacement, HVAC improvements, drainage enhancements, and general maintenance are increasingly important, particularly as insurance carriers have become more sensitive to roof age and overall property condition.

At Knight Real Estate Group, we bring more than 20 years of experience navigating both bullish and transitional markets. We know how to position properties for maximum impact and help buyers uncover value in changing conditions. Whether you’re buying, selling, or planning ahead, we’re here to guide you with data, perspective, and results.

Disclaimer: This report is based on available data and market trends as of 11/1/25. Actual market conditions may vary, and individuals are encouraged to consult with real estate professionals for personalized advice.