For one of the few times in recent memory, Santa Barbara has rental apartments available — although they’re mostly on the higher end of the market.
Rental vacancy is at 4.4%, which is high for an area where apartment vacancy rates have been as low as 0.5%.
“I think we’ve seen a big increase in single-family home sales, and some of that will include renters becoming buyers,” said Brian Johnson, president of the Santa Barbara Association of Realtors. “With the pandemic, I think people decided it was time to purchase so they had more space to live and work.”
The median cost of a home in Santa Barbara is $1.28 million, up from about $1.1 million in 2020, largely because of the increasing demand and competition for homes.
Recently constructed apartment buildings are also increasing the general supply, according to Johnson, who relies on data from CoStar.
“The positive there is that while the new inventory tends toward market-rate units with newer finishes and more amenities, there really is a group of people who want those and they’re filling those up,” Johnson said. “This will then free up inventory further down the line, and I think that’s had an impact on rents recently.”
Johnson said the new higher-end units have the amenities that renters are looking for.
“Through filtering, we will see the availability work its way down to lower-end units,” Johnson said. “I believe this will incentivize property owners to update their properties in ways that will make them more attractive while remaining in the same pricing area so as to not alienate tenants.”
He also said there just might be fewer people at this time moving to Santa Barbara.
“We saw people staying put during COVID,” said Johnson, who is also managing director and a senior associate for Radius Commercial Real Estate. “I’m not talking about people moving because they no longer have to go into their office but more of the natural movement we would see during the year. I believe we saw more people stay in their current situation rather than move.”
Some of the availability also might be attributed to students, and the COVID-19 pandemic keeping students out of Santa Barbara.
“I believe that could have played a small role in the increase of availability in certain areas,” Johnson said. “Isla Vista did not see the immediate lease up at the end of last summer, and there could be a few more units available around City College, but overall, we saw students wanting to be on or near campus even though classes were not in session.”
Residential property owner Ed St. George said he expects availability to drop.
“The increased rental housing availability will be over within a matter of a few months when the fall semester begins,” St. George said. “Santa Barbara is a college community. There are normally over 35,000 students between UCSB, SBCC and Westmont, and for the last year since COVID, a large majority of students stayed home. I fully expect our local college enrollment to swell over the normal numbers.”