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.
Santa Barbara Real Estate Market Report | October 2025
SANTA BARBARA REAL ESTATE UPDATE
As we move through the final quarter of 2025, Santa Barbara’s housing market continues to show its trademark resilience. Prices remain at or near all-time highs, even as inventory begins to tighten heading into the holiday season. Many sellers are now choosing to wait until the new year to list, while buyers—encouraged by recent rate cuts—are acting decisively to secure desirable properties before year-end.
OCTOBER 2025 OVERVIEW: STEADY MOMENTUM AND RECORD PRICING
Year-to-date through October, overall residential activity remains strong.
Total sales volume rose 11% year-over-year, with 1,156 transactions closed across South Santa Barbara County.
Single-Family Homes
- Average Price: $3,700,844 (+4%)
- Median Price: $2,350,000 (+6%)
Condos & Townhomes
- Average Price: $1,387,840 (+10%)
- Median Price: $1,075,000 (+8%)
Pricing continues to push historic levels, marking 35-year highs for both average and median values across property types.
INVENTORY & BUYER DYNAMICS
- Months of Inventory Supply: Declined for the second time this year to 3.55 months, reflecting both faster absorption and fewer new listings as the holidays approach.
- Cash Buyers: Comprised 38% of all transactions, underscoring continued equity strength and discretionary purchases at the high end.
This combination of motivated buyers and limited supply is sustaining price pressure across all segments, even as the market begins to seasonally slow.
FINAL TAKEAWAYS | BEYOND THE NUMBERS
Equity markets have surged in 2025—fueled by AI-sector growth and strong corporate earnings—helping support continued demand in Santa Barbara’s upper tier ($6M+). Meanwhile, the entry-level and mid-market segments (under $3M) remain notably resilient, bolstered by lifestyle-driven buyers and improved financing conditions.
Since the January LA fires, buyers have become increasingly sensitive to natural hazard exposure, favoring properties in lower-risk zones. Ongoing insurance challenges are adding complexity for foothill and high-fire-area homes, where underwriting standards and premiums remain elevated.
For homeowners considering selling within the next few years, property condition and insurability have never mattered more. System upgrades—roof replacement, HVAC improvements, drainage enhancements, and general maintenance—are proving vital in both valuation and marketability.
At Knight Real Estate Group, our decades of experience navigating both bullish and transitional markets means our clients benefit from informed strategy, meticulous preparation, and strong negotiation. Whether buying, selling, or planning ahead, we’re here to guide you with clarity, data, and results.
Disclaimer: This report is based on available data and market trends as of 10/1/25. Actual market conditions may vary, and individuals are encouraged to consult with real estate professionals for personalized advice.
Santa Barbara Real Estate Market Report | Q3 2025 Overview + September Market Recap
As we close out the third quarter of 2025, the Santa Barbara real estate market continues to show resilience amid shifting economic signals, rising inventory, and increased buyer selectivity. After a quieter summer, September brought a noticeable uptick in activity, driven by the Fed’s long-awaited rate cut and bullish equity markets. Still, a more discerning buyer pool is leading to shifts in pricing and seller strategy, adding new complexity to an already nuanced market.
Q3 OVERVIEW: STEADY SALES VOLUME, MIXED PRICING TRENDS
Compared to Q3 2024, the overall residential market saw modest year-over-year changes. Total sales volume was up 12%, with 346 total transactions closed in Q3 2025.
While both the average and median price have increased slightly relative to Q3 2024, segmented pricing tells a more complex story:
Single-family homes
Average price: $3,415,753 (▼2%)
Median price: $2,300,000 (▲5%)
Condos & townhomes
Average price: $1,314,546 (▼6%)
Median price: $1,180,000 (▼9%)
While prices are down slightly from last year’s third-quarter highs, they remain historically strong.
SEPTEMBER TELLS A MORE DYNAMIC STORY
Comparing September 2025 to September 2024, however, reveals a dramatic change:
- Single-family average price fell 14%
- Single-family median price dropped 6%
- Condo average price declined 4%
- Condo median price increased 1%
This sharp correction in September reflects the recent influx of new and repositioned listings combined with more cautious buyer sentiment, particularly at the upper end of the market where listings have grown. Buyer activity has shifted toward well-priced, move-in-ready properties, while homes in need of updates or priced aggressively are sitting longer and seeing price reductions.
INVENTORY & BUYER DYNAMICS
- Months of Inventory Supply: Rebounded to 3.91 in September, up from a low of 2.93 in August, marking the highest level year to date
- Cash Buyers: Represented 37% of all transactions, underscoring the role of equity-driven purchases in today’s market
This uptick in inventory likely correlates with the Fed’s September rate cut, which encouraged more sellers to re-enter the market.
FINAL TAKEAWAYS
As we enter Q4, Santa Barbara remains fundamentally sound but more nuanced. Luxury sales are recalibrating, while core neighborhoods are showing stability. The market is rebalancing, offering both challenges and opportunities for strategic buyers and sellers.
At Knight Real Estate Group, we bring over 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 shifting 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 9/1/25. Actual market conditions may vary, and individuals are encouraged to consult with real estate professionals for personalized advice.