Santa Barbara Real Estate Market Update, August 2025

From Frenzy to Friendly: A Market That Lets Buyers Breathe

While the national housing market in August showed a mixed picture of growing inventory and softer demand, Santa Barbara continues to demonstrate resilience. The shift toward a more balanced market is creating positive opportunities for both buyers and sellers across our region. In this blog post, top realtor Cristal Clarke tells the story of the August real estate market both locally and nationally.

A beautiful woman behind a desk with a phone and laptop.

Key Market Highlights

Mortgage Rates Holding Steady

The average 30-year fixed mortgage rate remained in the mid-6% range throughout August. While higher than historic lows, these rates are slightly below the early 2025 peak. In Santa Barbara, where many buyers purchase with cash or larger down payments, the impact of rate is less pronounced, helping to keep demand steady

The average 30-year fixed mortgage rate remained in the mid-6% range throughout August. While higher than historic lows, these rates are slightly below the early 2025 peak. In Santa Barbara, where many buyers purchase with cash or larger down payments, the impact of rate is less pronounced, helping to keep demand steady.

Home Prices Flattening — A Sign of Stability

Nationally, price growth slowed, with many regions seeing little year-over-year change. Here in Santa Barbara, median home values held firm, showing stability rather than the declines found elsewhere. Price appreciation may be slower than in recent years, but that stability is reassuring for sellers and signals a healthier, more sustainable market.

Inventory Growth Benefits Buyers

Inventory has been rising for 21 consecutive months nationwide, and Santa Barbara is no exception. Buyers are enjoying more options than at any point in recent years. For sellers, this means that pricing strategically is essential. When properly valued and well presented, homes continue to sell here.

Balanced Negotiations Emerging

Sellers are beginning to offer concessions to attract buyers, something rarely seen in the frenzied markets of 2020–2022. Buyers now have more time to make decisions and the ability to negotiate terms, while sellers benefit from steady demand for Santa Barbara’s unique lifestyle properties.

Regional Strength: Santa Barbara Stands Out

While some national markets experienced price softening, the market in Santa Barbara remains strong. Our region’s enduring appeal, from world-class beaches and wineries to top-tier schools and cultural offerings, continues to attract discerning buyers. The combination of stable prices, increased inventory, and seller flexibility creates a rare window of opportunity.

Looking Ahead

Through the remainder of 2025, conditions will likely remain challenging in many U.S. markets. Yet in Santa Barbara, the story is one of balance and resilience. Buyers are finding more negotiating power and greater choice, while sellers benefit from steady demand driven by lifestyle, location, and limited long-term supply.

Santa Barbara’s market may be evolving, but its foundation remains strong. For those considering a move, now may be the ideal moment to take advantage of increased options and a more even playing field.

Santa Barbara Real Estate Market Update by Neighborhoods

Montecito

This highly sought-after coastal enclave welcomed 31 new listings, broadening opportunities for discerning buyers seeking privacy, elegance, and ocean breezes. Meanwhile, 14 price adjustments showed sellers’ willingness to align with market conditions strategically. Activity stayed strong, with 15 closed sales and 18 homes pending by the month’s end. Montecito continues to attract serious buyer interest, highlighted by its timeless appeal, serene mountain views, proximity to beaches, hiking trails, and world-class amenities. August again proved that Montecito remains one of Santa Barbara’s most desirable and resilient luxury markets.

A birds eye view of a world-class luxury Modernist estate.

Santa Barbara

In August, Santa Barbara’s housing sector continued to show strength and stability. A total of 124 new listings entered the market, offering a wide range of opportunities for buyers throughout the American Riviera. Strategic pricing remained important, with 82 sellers adjusting their asking prices to meet changing demand. Meanwhile, 95 homes closed escrow and 101 properties went under contract, clear signs of ongoing buyer confidence and active market activity.

Hope Ranch

This exclusive equestrian enclave carried its steady momentum into August, adding 5 new listings that strengthened the area’s limited and prestigious inventory. Sellers continued to adapt to market trends while maintaining value, as seen in 6 strategic price adjustments. The month ended with 3 homes sold and another 9 under contract, highlighting ongoing demand in one of Santa Barbara’s most private and sought-after communities. The combination of privacy, acreage, and world-class equestrian amenities continues to attract discerning buyers seeking a refined lifestyle along the California coast.

Carpinteria

The luxury home market in this charming seaside town stayed active and promising throughout August. With 24 new listings, buyers had a variety of options in a community known for its laid-back coastal lifestyle. A total of 11 price adjustments helped reposition properties to draw in buyers in a changing market. By the end of the month, 13 homes had closed escrow and 16 were pending, indicating consistent interest. The Carpinteria housing scene continues to show strength and vitality. From beachside retreats to mountain-view properties, this peaceful South Coast enclave attracts those seeking natural beauty, privacy, and a slower pace, just minutes from Santa Barbara.

A beachfront cottage in Montecito right on the sand.

Featured Property

Montecito Beachfront Cottage: A Century-Old Legacy on the Sand

3 Beds 3 Baths 920 Sq.Ft.
Listing Price: ^$ 12,500,000

A Storied Provenance

This rare beachfront cottage in Montecito, cherished by the same family for over a century, offers more than just a home: it’s an invitation to history. Originally gifted in 1919, the adobe was one of several built on Miramar Beach for local friends. Five generations have crossed its threshold, making it a true legacy property with deep roots in Santa Barbara.

The beach in front of a Montecito beachfront cottage.

Timeless Coastal Character

Few properties embody history and charm quite like this one. The family’s lineage dates back to one of Montecito’s earliest grand homes and even includes ownership of a Santa Barbara Channel Island. Since the 1920s, this seaside retreat has welcomed artists, writers, and visionaries, transforming from a simple day house for swimming and storytelling into a refined residence that retains its authentic character.

The living room of a beachfront cottage with a soaring redwood beamed ceiling, a cozy fireplace and a breathtaking view.

Architectural Warmth & Ocean Views

At the heart of the cottage is a striking living room, topped by a soaring redwood-beamed ceiling, board-and-batten walls, and wide-plank floors. A captivating fireplace anchors the space, while sunlight floods across the wood, and expansive windows offer breathtaking views of the Pacific Ocean and the Santa Ynez Mountains. From here, one of the most iconic views of Montecito unfolds with the ocean at your feet.

Inside outside living right on the beach at a Montecito high end cottage.

Seamless Indoor-Outdoor Living

French doors extend living spaces to porches and decks designed for sea breezes, sunset cocktails, or candlelit evenings. Lush, mature landscaping leads to a private boardwalk that takes you directly to the sand. This connection to the shore is what makes the property both intimate and extraordinary, where ocean, home, and history come together.

A birds eye view of the location of a beachside Montecito cottage.

World-Class Location

Located on Miramar Beach near Fernald Point, the home is just minutes from boutique shops and dining on Coast Village Road, as well as the Rosewood Miramar Beach Resort. Opportunities to own such a historic beachfront property in Montecito are extremely rare. This is an opportunity to create lasting family memories while celebrating California’s coastal heritage.

Whether you’re thinking about selling your home, searching for your next dream property, or managing both, the insights from August can help guide your decisions. Cristal Clarke offers personalized, no-obligation consultations to help you make confident, informed choices. Contact her at (805) 886-9378 or by email at Cristal@montecito-estate.com for your free consultation. Meanwhile, stay updated on the real estate market by reading her monthly reports.

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Client Reviews

“It was an emotional experience selling our mother’s home in Montecito that we all loved so much but Cristal made the process easier on our whole family by guiding us through the transaction every step of the way. She knows the market so well and everything she recommended was on point including the asking price, painting, and staging the home, which looked beautiful and helped the buyer envision her new home. We sold it the first day it hit the market with an offer above asking! Cristal did an incredible job communicating with us and the buyer to ensure that the transaction would run smoothly. We highly recommend using Cristal, she was a pleasure to work with! ”

- J & A

“Cristal is a pleasure to work with! Her knowledge of the local real estate market coupled with her amazing listening skills resulted in her showing us an array of homes that were all excellent choices. Her low-pressure patient attitude made us feel extremely comfortable with the whole process. I cannot recommend her highly enough.”

- M.F.

“Cristal Clarke is #1 in her field - and you don't become #1 by luck. Cristal works harder, and longer, and with more charm and patience than any real estate agent I have ever worked with in the past; her calendar has no weekend, her days have no clocks, her only concern is selling your property as soon as possible and for the best price on the market. Am I a fan? You bet!”

- P.B.

“We have used Cristal now several times and cannot express how grateful we are for her expertise, dedication, and unwavering support throughout the entire home-buying process. Cristal is knowledgeable, patient and attentive. Her attention to detail is remarkable, and she consistently went above and beyond to provide us with all the information and resources we needed to make informed decisions. Cristal is a skillful negotiator and advocate. She can navigate complex negotiations with professionalism and grace and felt like a true partner to us in the home-buying process. Cristal has a genuine passion for real estate and a deep commitment to her clients' satisfaction. I cannot speak highly enough of Cristal and her exceptional service. She is a true expert in her field and her dedication to excellence, combined with unwavering support is the reason we choose to work with her for all our real estate buying needs.”

- T.C.

“Cristal is a top-notch realtor who sold my home before it ever went on the market. I had two competing offers that enabled me to get top dollar for my home. Not only is Cristal superb but her team is extraordinary. I cannot say enough about Cristal and her team. They are simply phenomenal, the consummate professionals, who took care of every possible detail, making the sale and transition period, smooth from our end. They are also lovely, caring people, who knew all the right professionals, to get the job done. Thank you, everyone!”

- D.R.

“I could list lots of cool adjectives to describe Cristal. All good by the way. But, that is not why I or anyone should hire Cristal. My reason for hiring her, which proved to be correct, is very simple. She got the job done. And, she does it time and time again and with zero issues. And, that is why she is one of the top agents in the country. End of subject. ”

- M.A.

“Working with Cristal was a complete pleasure. Cristal was extremely patient with us as we evaluated nearly 2 dozen homes over a span of 2 years. Her knowledge of the market is unmatched. Cristal provided us with exceptional counsel as we evaluated opportunities and negotiated pricing. The closing process was handled thoroughly and efficiently. We could not be happier with our purchase and even more happy to now call Cristal our friend.”

- D.K.

“Cristal Clarke has conducted numerous real estate transactions for me beginning 13 years ago with the purchase of a Lemon Ranch. She has handled both large and small purchases and sales with equal dedication. As a negotiator, you can’t find anyone better. Her transactions are always conducted in the most appropriate and professional manner. Cristal has considerable knowledge of the Santa Barbara market.”

- S.N. Decker Ph.D.

“Living in Europe, we were to say the least, unaccustomed to the nuances of Real Estate acquisition in California and Cristal steered us through the process with absolute professionalism and personal attention to detail at every turn. Her in-depth knowledge of the market place combined with enthusiasm and drive was the only reason we secured the property of our dreams and will be forever grateful. If you are looking for personal discrete and private representation of the highest quality we suggest you look no further than Cristal Clarke.”

- Johan and Paula van den Berg

“Cristal is very straightforward, cheerful, helpful, professional and trustworthy….we felt very lucky to work with her.”

- John and Lacey Williams

“After considering our many choices, we are grateful it was Cristal Clarke of Sotheby’s International who represented the sale of our Montecito cottage. We are familiar with Cristal’s reputation of hard work and dedication to clients, but it was her attention to detail that made our experience so positive. She offered suggestions for staging the property, worked in harmony with potential buyers and was even able to secure back up offers. The sale of our cottage was completed much sooner than we expected, due in great part to Cristal’s professional skills and support. We highly recommend Cristal as a first choice for anyone needing representation with real estate.”

- Michael & Nancy Lee

“Our experience in working with Cristal Clarke resulted in the successful and discrete acquisition of a property which was not yet on the open market. Her knowledge of the Montecito/Santa Barbara area and vast expertise blended with her passion for real estate and architecture, provided us with the very highest level of professionalism and personalized services. Cristal exhibited a rare combination of excellent communications, attention to detail, creativity and patience.”

- Richard and Catherine Frinier

“Cristal really breaks the mold. She knows every nook and cranny of this real estate market, understands value, and follows up on everything, all the time. She was incredibly patient with our two year quest to find the perfect house. Every house hunting trip from across the country was well planned, and our time was never wasted. On top of her professionalism and expertise, she is delightful to spend time with. We are thrilled with the home we purchased, and grateful to Cristal for so wisely advising us through this process, right through to the close and beyond.”

- Laurie Siegel

“We met Cristal first in the course of renting a winter home (for three years), then buying a house using her as our agent. She was amazingly good at listening to our wants and showing us homes that fit our needs. Her mastery of the paperwork was perfect. Most importantly, there was never a situation where we doubted her straightforwardness or integrity. If we do another real estate transaction in Montecito (which I doubt, we’re happy with what we purchased), without question we’d use Cristal again.”

- Ken Saffir

“Susan and I just want to thank you for your efforts in the sale of our home. You are really quite amazing. Your competence, persistence, optimism and humor made the entire process effortless. Every problem that arose, you somehow fixed; any obstacle, you overcame. We have bought and sold many homes. It has never been such a painless and enjoyable process!”

- Michael & Susan Marquart

“A little something about “our” realtor, Cristal Clarke. My wife and I came to Santa Barbara about fifteen years ago looking for a seasonal home from which to enjoy the weather and amenities of the central coast. Being in the real estate business myself I was familiar with agents and brokers so entered the market with open eyes. We “flipped” a few houses in the early years, dealing with various agents and finally ended up in Montecito. That’s when good fortune put us together with Cristal. To say we were impressed is to put it mildly. Cristal really knows the market. She is familiar with the area, its history and trends. When we have questions about a particular property she either has the answers immediately or gets back to us by phone or email. There is no waiting or wondering with Cristal. She is an agent who is “on top of it.” Her recommendations as to price points, contractors, inspectors and title agents have proven to be exceptional, showing great insight and the highest professional standards. We consider ourselves exceedingly fortunate to say that Cristal Clarke is our realtor and would recommend her services to any serious buyer or seller.”

- Rob & Judi Kelch