Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

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By edhat staff

According to a new report by WalletHub, Santa Barbara has been ranked as the third worst city for first-time home buyers.

In 2018, approximately 39% of all U.S. single-family home purchases were made by first-time buyers. July is also rated as one of the top months for home sales.

To determine the most favorable housing markets for first-time buyers, WalletHub took the pulse of real estate in 300 cities of varying sizes using 27 key metrics. The data set ranges from housing affordability to real-estate tax rate to property-crime rate.

According to the overall rankings Tampa, FL came in at #1; Overland Park, KS at #2; Thornton, CO at #3; Grand Rapids, MI at #4; and Boise, ID at #5. The highest rated California city on the overall list is Roseville that came in at #28 followed by Visalia at #89. 

Santa Barbara was ranked at the bottom, the third worst at #298 overall and #135 among small cities. Santa Barbra was also listed under the highest cost of living joined by San Francisco, New York, and Honolulu.

Below is the specific breakdown:

Buying a First Home in Santa Barbara (1=Best; 150=Avg.):

  • 257th – Housing Affordability
  • 276th – Cost of Living
  • 278th – Rent-to-Price Ratio
  • 158th – Median Home-Price Appreciation
  • 43rd – Foreclosure Rate
  • 127th – Property-Crime Rate

Comparitavely, Santa Maria ranks #177 overall while Ventura ranks #240 and Oxnard ranks #231. 

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SantaBarbaraObserver Jul 14, 2019 07:50 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

If you bought a house in SB prior to late 90’s then you have been the recipient of the shift in monetary policy and a large population boom that has driven the US economy for the last 30+ years. The shift in policy led to cheap and easy loans, which led to a giant increase in property values. Debt, not hard assets or productivity is our economic driver. Paired with an influx of 15million people into CA over the last 40 years and you have the hockey stick rise in home valuations that has gifted many of the Boomer generation untold advantages and wealth. But the real stick is what these people did with their newfound fortunes. They didnt spread the wealth, or pay it forward… Nope. They spent it all on themselves and left nothing but trillions in debt for their grandchildren. A generation that was gifted the greatest economy in history sucked up all the wealth while they indebted their great, great grandkids with more debt than has been seen in all of human history. All while paying nothing forward for future generations... The Boomers are called the Locust Generation for this very reason. But if you think its expensive now, just wait. One only needs to look towards SF, LA, London, Hong Kong or Moscow to see how high real estate prices can and will climb. The answer is to either make more money, or live somewhere appropriate for your income… The Boomer’s have assured that as long as they are alive, they will do everything in their power to keep their wealth and advantages. Welcome to the Boomer’s version of America! Aint it grand?

SantaBarbaraObserver Jul 14, 2019 08:34 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

50. If you have no mortgage than you're neither well advised, nor do you resemble the norm... The debt I reference is society's debt, not personal. Reading these comments it seems that many people here cannot separate their own experiences and personal antidotes from the realities that face the whole or the facts and figures... Regardless, there are so many nice places to live in the USA that do not require 200k down payments and 200k a year in income. Life is so much better for people in these places because they are free from the burden of justifying their economic struggles with the lie that "its better here".... You to can have peace, but you'll have to give up the false premise that SB is 'paradise' and that its worth sacrificing your time and well being for...

loraine84 Jul 13, 2019 08:52 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

Bought 3 small houses on one acre lot behind the natural history museum in 1974, for $48 thousand dollars. There were 3 families UCSB grads., we were sort of a commune, (we shared meals, laundry room, had mandatory work days every Saturday because the lot and the houses were in bad shape)...we fixed up houses, put in sidewalks, planted grass and flowers etc. I watched SB, as out of town real estate companies swooped down SB...around 76, until then it had been like any other small town...and watched prices insanely escalate year after year after year. I hate it, this town used to be a very diverse community, most could afford it, it was different, even every store downtown State St. was full ..... mostly independent owners. And although (over the years i bought out originals owners who moved to East coast) the latest estimate of my property now is 3 million dollars, I would change it all back to 1974 when Santa Barbara was a real vibrant, diverse, affordable for all, town.

mtndriver Jul 14, 2019 04:20 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

I'm with you, Lorraine. Similar situation, too, right down to the semi-communal living in the foothills. Started out as renters and saved enough for three friends to put a 50% down payment on the property, and fixed it up over the years. Our houses were/are middle class houses for middle class people, and now they are worth way more than what I would consider a middle class family could afford. What would happen if we sold? Some rich investor would buy the place and probably tear down the houses and build McMansions, flip them for big bucks. There goes the neighborhood. Used to be surrounded by horses and could see all the way to the ocean. No more. Change is inevitable, but does money always have to be the driver of that? Sad.

mtndriver Jul 13, 2019 10:35 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

It makes me sad that people are being encouraged to make their decisions about what to study and what to do with their lives based solely on economics. There are so many really satisfying and beneficial ways to make a living that don't pay as well but add a lot more value to the whole community in intangible ways than being an accountant or developing a new app that makes some already simple task easier at the same time it collects data on your every move. I wish the people in service jobs and helping professions and the arts, teachers and nurses and librarians and physical therapists and musicians and craftspeople and so many other honorable careers that make our world easier to live in didn't have to worry so much about where they can afford to live, when their rent is going to become unsustainable. It's almost as if people are arguing that it's more virtuous to have a high salary, therefore you deserve to own a house. Okay, end of rant.

a-1590494844 Jul 13, 2019 10:20 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

There is a reason over 70% of the population here rents. The only way homeownership here makes any sense is if you purchased many many years ago, and now your house has significantly even if not warranted, increased in equity. If Prop 13 passes, that will change things dramatically which is why we are seeing so many for sale signs lately, by savvy people in the know. Not to mention, I feel bad for homeowners living in the DT area where rentals are popping up everywhere and there is increasingly bad parking. Those are the areas where the bubble will burst first.

a-1590494844 Jul 14, 2019 08:55 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

BENE maybe you should start talking to property owners, including commercial property owners. One of their big concerns is the repeal and what it will do to their property taxes. Anyone renewing a commercial lease right now knows that because they are trying to negotiate higher rents to cover what ever portion the NNN doesn't. Same with homeowners. People have been lucky here in terms of property taxes. And the artificially high home prices cannot be sustained much longer. It's a bubble. This is not the place to buy. IF you want to live here then renting is the best option.

Bene Jul 13, 2019 08:33 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

When you say "when prop 13 passes" do you mean as in "passes away?" Your comment is helpful, but only if you'd give even one piece of data to back up your suppositions that prop 13 will soon be done away with, and that there is enough evidence of that to be the reason all these "savvy people" are selling now.

semag Jul 13, 2019 09:14 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

I was a first time buyer in Goleta in 2011. Graduated college from UCSB in 2006. Granted recession and housing slump helped, but for reference, Goleta house was 1260 sq. Feet and $443 per sq. Foot. Sold and moved to a new house in Goleta at $513/sq. Foot in 2018. If I had started at 0 dollars in 2011, I could totally have bought the house I sold for the price I sold it at, so I think the main problem is that most people are just pretty terrible at living frugally and saving money. If you have a decent engineering job, you should be able to buy a starter home in SB /Goleta after 5 years of renting and saving.

semag Jul 14, 2019 08:04 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

Everyone says you can't afford to buy here, and when I find something immediately you tell me it is a dump. Heaven forbid I show you all the mobile homes or condos available. If you throw a couple years of sweat equity into that property on Ardmore and 20-30k, you could make 100% return on your initial investment (powrr of leverage). You would also be pretty hedged against downturns in property values, because it is already towards the bottom. But go ahead and convince yourself that life is so hard because no one wants to learn how to manage money properly. #mrmoneymustache.

semag Jul 13, 2019 12:00 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

MTNDRVER - Goleta detached house at $630K listed 11 days ago in 2019.

mtndriver Jul 13, 2019 10:09 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

You paid less than $600k for an actual detached single family residence in 2011? That was a real bargain. The thing is, a lot of people don't have decent engineering jobs. My kids who grew up here and graduated from UCSB, have good jobs out of state in construction and local government and can't afford to move back here. They paid $150/sq. ft. for their place in Santa Fe (NM) in 2009. Sold it last year for about $170 sq. ft. Luckily they will inherit our house here some day, unless it burns down or shakes to pieces!

aragorn Jul 13, 2019 06:58 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

I was born here in SB and I grew up over on the Eastside. The majority of the homes over there were single working family homes, from 2 to three bedrooms. Some of the families rented or owned the homes. My mom, a single working mom in those days (very rare at that time) was a housekeeper in Montecito and she rented a one bedroom, later on we moved to a two bedroom on Bregante Ln. in 1970 and at that time she was paying $150.00 per month. I was house sitting for a couple and looking after their dog for a weekend, their home is almost at the end of N. Voluntario St., and as I was heading back to their house walking their dog and I ran into a realtor and I asked him what is the average price to purchase a house over here on the Eastside, he told me 1 milion. Working and middle class families just cannot afford to buy a home here in SB. 70% of the workforce here in SB commute from as far north of Santa Maria and as far south of a Thousand Oaks and Simi Valley. Only 30% of the workforce resides here in SB. (I also found out that over 7,000 Latino families have already moved away from SB. They just cannot afford to live here.)

a-1590494844 Jul 13, 2019 06:40 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

@Matty, I'm the guy that bought my first home on the Westside in '02. The house is 1,377 square feet (SF). I bought it for about $530/SF ($730k). Per realtor dot com the current estimated value is $727/SF ($1m). You're right, it wasn't $1000/SF then...nor now.

CoastWatch Jul 12, 2019 04:15 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

Whinny "millennials" are in the same position that any others before them- They just don't want to sacrifice to get what they WANT and want it NOW... Not all, mind you, but most are entitled due to their parents being able to "give them" what their parents couldn't or DIDN'T... I will use an "entitlement" millennial I know personally as an example; Born and raised in SB- Graduated College and HAD to continue until a Master's Degree was obtained... Feels that she should be able to live and work in SB because of her "education". Refuses to consider a job offer in the Santa Maria Valley, Paso Robles or anywhere not on or near "the beach"... Lives with parents until she can find The Job and save enough to move out. In contrast, I and all my friends couldn't wait to move out @18- Some went to Jr. College and started working on their careers by age 21, others worked through the university experience and started in the lowest positions in their career choice EVEN though they had a BS/BA and most left the area to get those jobs.... The funnest (ironic) thing is, the most successful friend went on to learn the welding / building trade, ended up owning his own business and it's taken off... Personally, I lived an hour away from SB, bought homes that needed tons of work and kept buying, fixing, and selling 3 homes until I could afford a crumby 780 sq ft Westside home...

EastBeach Jul 13, 2019 12:12 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

Regarding the "debt trap" ... the rise/fall/rise of for-profit colleges, commercialization of educational loans, and the push to cut state funding for higher education across the country ... all backed by factions on the political right (e.g. Betsy DeVos) are a large part of the problem.

therealbebe Jul 12, 2019 06:15 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

While this is a way over-generalized commentary, it does bring up an important point about education. Going to college and getting an advanced degree is definitely NOT the road to security it used to be. It's a debt trap that no longer produces any kind of insurance. Life is different now. Learning a craft or trade and having at least a bit of an entrepreneurial spirit gets people much further. So no, young people are not in the same position as their parents - and as such, they need to stop thinking that the same pieces will fit a different puzzle.

sbdude Jul 12, 2019 01:28 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

A lot of people seem to think that home ownership is out of reach for millennials. Pro tip for millennials: If you have a dream of home ownership and a nice life in a nice place, major in engineering or math or computer science or accounting. You'll make way more money straight out of college and pay off your student loans and build wealth much more quickly. Nothing wrong with a liberal arts or humanities major (many rich and successful business executives did), but those graduates must be realistic about their ability to create wealth in their 20s and early 30s. That, and do what @9:09 says.

a-1590494844 Jul 12, 2019 01:11 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

Whether you are a 1st time or 10th time homebuyer you'd have to be nutz to buy a house in this city at this time anyway. When a literal postage stamp lot, with no more than 800 square feet in a normal/not desirable location downtown with awful parking, mattresses and furniture on the side of the road, goes for over $800K it's called an unsustainable bubble that you will never get any / not much equity out of. THe house next door to us sold for a ridiculous amount of money and the guy relisted it about 3 years later. There are way better more affordable places to live if you are looking for homeownership, some quiet and space, than here.

a-1590494844 Jul 13, 2019 10:14 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

By your logic re: the "rental game", the 800 square foot house, on the market for $800K, cannot get more than $3K in rent. Maybe a bit more. With a $100K down payment, which most cannot afford, your mortgage/taxes will exceed that rent by about $3K/month, as your monthly payment will be about $7K, maybe a bit less, not to mention utilities, upkeep out of your pocket and the like. The house will NEVER rent for $7K/month. So, it is way smarter to rent in this town than buy.

a-1590494844 Jul 12, 2019 09:59 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

Report tells us what we already knew. SB/Goleta has not been a horrible place for first time buyers since at least the early 70's. Pro tip: Get a decent job in SB/Goleta with good prospects for advancement. Buy your first home in Ventura or Buellton/Solvang. Don't whine about the commute. Save every nickle and improve your home with an eye to resale ROI. After 3-5 years sell that home and roll the equity into a Goleta home. Live there a long time and enjoy the ride.

Luvaduck Jul 13, 2019 10:36 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

Ohio isn't the dump some people think. Sure the weather isn't like Santa Barbara's, but in all the larger cities cultural availability is there if you want it and medical care is very good if you need it. Both Cleveland Clinic and the OSU hospital complexes are highly ranked. Currently meth and theft has become a big problem in some places. It was brought on by loss of manufacturing jobs and because trusting older residents are easy targets in small towns.

a-1590494844 Jul 12, 2019 12:05 PM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

@11:39 Sure, if you studied a subject in low demand, took on $50k in debt to get your degree, and make $40-50k a year in a job with very slow advancement you may never be able to purchase a home in SB. Those millennial with great skills, good jobs, and low debt will do just fine. Sam as people have done locally for many decades. If you're a millennial with high debt you should consider Akron, Ohio. It is a nice place and the cost of living appears great compared to SB.

a-1590494844 Jul 12, 2019 10:54 AM
Santa Barbara Ranked 3rd Worst City for First-Time Home Buyers

I was a first time buyer in '02 (Westside). No assistance from family, although they wished they could have helped. It can be done but the stars have to align and we didn't eat out those first few years. Much easier to follow the route that 9:59 describes.

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