SANTA BARBARA REAL ESTATE · EVERY WEEK
The Weekly Read
Week ending October 4, 2026
Here’s what happened in the Santa Barbara real estate market for the week of September 28 – October 4, 2026, covering homes for sale and sold in Santa Barbara, Montecito, Hope Ranch, Goleta, Summerland and Carpinteria.
No need to wait for a monthly recap. By the time most market reports come out, the homes in them have already sold, cut their price or come off the market.
So I built The Weekly Read: every new listing, sale and price change in the Santa Barbara MLS, from Goleta to Carpinteria, every week. It’s new, and I’d like to know if it’s useful to you.
The Week in Numbers · 9/28 – 10/4
36 | 31 | 37 | 26 |
The median sale was $1,925,000. Ten homes sold above their original asking price, thirteen sold for less than 90% of it, and half went under contract within 10 days.
The Headlines
$18 million on Picacho Lane
857 Picacho Lane in Montecito closed at $18,000,000. The house, on two acres, was built in 2010 by the late mystery novelist Sue Grafton and her husband, Steve Humphrey. Actress Meg Ryan renovated it and sold it for $16.8 million in June 2025. The new owner relisted it two months later at $21,900,000 and cut the price to $19,900,000 this June. The final price was about $1.2 million more than they paid, before commissions and carrying costs.
Over asking, in under a week
1303 Las Alturas Road sold for $3,326,000, about 11% over its $3,000,000 list price, in 6 days. 831 Volante Place in Goleta sold 6% over asking in 3 days.
A wide gap on Paseo Ferrelo
878 Paseo Ferrelo, a Lower Riviera cottage that came on the market in July, sold for $2,550,000, about 75% of its original $3,379,000 price.
The biggest price cuts
1106 Crestline Drive came down 13%, and 1021/1029 Las Alturas Road came down 12.5%.
New Short-Term Rental Rules
On October 6, the Santa Barbara City Council voted 7–0 to approve new rules for short-term rentals in the city. Here’s the short version.
Does this apply to you?
Only if your home is inside Santa Barbara city limits. Montecito, Summerland, Hope Ranch and other unincorporated areas follow Santa Barbara County’s rules. Goleta and Carpinteria have their own. Not sure where your home falls? Check the maps below.
- City map: where short-term rentals are allowed
- City zoning map (shows city limits)
- The full ordinances on the city’s website
Inland neighborhoods
Whole-home rentals are no longer allowed in residential zones or high fire hazard areas. They’re allowed only in commercial and mixed-use areas like downtown, the Milpas corridor and upper State Street.
Coastal zone
Whole-home rentals are limited to mapped areas such as West Beach, lower Milpas, Mesa commercial areas and Coast Village Road. Homeshares, where the owner stays overnight, are allowed more widely, including single-family parts of the Mesa.
What it means for the Mesa
Large parts of the Mesa are in the coastal zone. Once the Coastal Commission approves the rules, whole-home vacation rentals won’t be allowed in its single-family and two-family neighborhoods, only in the Mesa’s commercial areas. Owners can still rent a room while they live there. Some owners who count on vacation rental income may switch to long-term tenants or sell, which could bring more Mesa homes to market next year.
The basic rules
One license per owner and one rental per lot. Two-night minimum. Quiet hours 10 p.m. to 7 a.m. A local contact has to answer complaints within 30 minutes. ADUs, affordable units and units with a long-term tenant in the last two years don’t qualify.
The cost
$3,334 to apply and $2,897 a year to renew.
Key dates
Final vote: October 27. Licensing opens: January 11, 2027. Current operators have until July 10, 2027 to get licensed. The coastal rules still need California Coastal Commission approval, expected next year.
By the numbers
About 265 rentals pay the city’s hotel tax today. City staff expect that to drop to around 65 in the coastal zone.
If you’re buying or selling
If short-term rental income is part of the plan, check the zoning before you make an offer or set a price. Send me the address and I’ll look it up.
Which Way It’s Leaning
Leaning slightly toward buyers. Of 7 measures, none moved in sellers’ favor against the prior 4 weeks, 2 moved against them, and 5 held flat. Only 6.5% of homes went under contract within 7 days, down from 20%.
The full report has every new listing, sale and price change, plus mortgage rates, the Treasury market and the S&P 500. Tap any card or chart to see the data behind it.
The question I hear most is “How’s the market?” The Weekly Read is my answer, updated every week.
My New Listing: 519 Coronel Place #2
A great location, minutes from the beach, Santa Barbara City College, the Funk Zone and downtown. A remodeled 2 bedroom, 2½ bath townhouse in a six-unit development. With only six units, a unit here rarely comes up. The last sale was in 2017. If you’ve been waiting for a move-in ready place this close to the beach, this is the one. It works as a home, a getaway or a rental. Offered at $895,000.
Need Help or Want a Consultation?
Thinking about buying or selling? Wondering what your home is worth, or how the new short-term rental rules affect you? Call me at 805.637.4400 and tell me what’s going on. I’ll give you a straight answer, even if the answer is to wait.
Buying soon? With the market leaning toward buyers, there’s more room to negotiate. My free Savvy Buyer’s Toolkit walks you through the steps to buying here, neighborhoods, loans and offers, with calculators to run the numbers. My clients also get my guide to negotiating with sellers, my local vendor list and more.
Selling? Ask me about my private seller portal, where you can follow open house activity and buyer feedback on your home.
If someone you know could use help, I’d be glad to talk with them.
Kathy
Kathy Henry · Broker Associate
Sotheby's International Realty · Montecito
805.637.4400 · kathyhenry.net
CA DRE #01403548
