More Homes, More Movement in Santa Barbara

The end of 2025 was predictably slow, as most people prefer not to search for housing during the holidays. What’s been notable, however, is the last three weeks—daily new listings have increased meaningfully across the market. This is the typical post-New Year bump we see each year, driven by sellers who paused during the holidays. What’s different this time is that the increase in inventory is being met with improving sentiment.

Interest rates have dipped below 6% for the first time in nearly three years, and that shift is creating cautious optimism. Over the past two weeks, I’ve had multiple clients reach out about selling—some due to relocation, others in response to evolving landlord-tenant regulations, and some simply feeling that now is the right time to cash out.

On the buyer side, demand remains steady. Buyers are still motivated by the need for more space, long-term appreciation, and opportunities in rental property—even with stricter regulations. There is a continued belief in the strength and resilience of the Santa Barbara real estate market.

As always, pricing in the months ahead will come down to supply and demand. Below you’ll find additional information and articles covering market trends, interest rates, rent policies, and local projects. If you’d like to understand what this means for your specific neighborhood, feel free to reach out—I’m always happy to connect.

We Asked a Real Estate Pro What Bathroom Upgrades Always Impress Buyers—They Named These 5

Key Points

• If your bathroom doesn’t feel bright, intentional, or functional, it may turn off potential buyers.
• For darker bathrooms, assess the lighting plan and adjust accordingly.
• Updating or replacing dirty and broken grouting can be just as effective as repainting the walls.

If selling your home is on your list of priorities for 2026, now is a great time to consider what easy upgrades and projects you can take on to entice potential buyers. 

While you can’t please everyone, there are some parts of the home that are guaranteed to make or break interest, and the bathroom definitely ranks high on the list. 

With this in mind, we turned to a luxury real estate pro to get her thoughts on the easiest, low-lift ways to upgrade your bathroom ahead of a sale. 

Focus on Functionality

According to real estate pro Shelton Wilder, most buyers have pretty basic needs when it comes to the bathroom. 

“They want the bathroom to feel clean, easy to use, and visually cohesive,” she says. “Even a small space should feel intentional, well-maintained, and aligned with the overall style of the home.”

This, of course, doesn’t mean you need to do a complete overhaul to create a minimalist, zen-like space. Instead, Wilder says there are a few easy, small changes you can make to enhance this particular room in your house. 

“Focus on clean lines, fresh finishes, and consistency,” she says. “When a space feels cared for, buyers assume the home has been well maintained overall.”

...

Affordability forecast indicates ‘small-wins year’ for housing 

Housing will face a ‘significant headwind’ in 2026 

Will mortgage rates drop below 5% in 2026? Here's what experts say.

Mortgage rates have been on a slow but noticeable decline over the past year. And in recent months, they actually reached their lowest point in over three years. There are no multiple ways in which qualified borrowers can secure rates under 6% now.

It's great news for hopeful homebuyers, as well as existing homeowners who have been eyeing a refinance. But it also begs the question: How low can mortgage rates actually go? Could they fall below the 5% mark at some point in the near future?

There's no hard-and-fast answer, so we asked some mortgage pros what they think — and how to get the lowest possible rate you can in today's market. 

Start by seeing how low your current mortgage rate offers are here.
 

Will mortgage rates drop below 5% in 2026?

Rates would need to fall more than a full percentage point to get below 5%, according to Freddie Mac's most recent numbers, although Zillow has a few options listed already in the high-5% range. And while that's possible, "a number of pieces would need to fit into the puzzle," according to Jeff DerGurahian, chief investment officer and head economist at loanDepot.

"We'd need to see inflation falling to pre-COVID levels, significant weakness in the labor market, and data that signals slower economic growth," DerGurahian says. 

President Trump's recent announcement of a potential $200 billion in mortgage-backed securities (MBS) purchases could also push rates lower, some experts say. 

"There are several indicating factors that cause mortgage interest rates to rise and fall, and two key ones come from the bond market - the 10-year treasury and mortgage-backed securities," says Lynette Arrasmith, a mortgage advisor for Churchill Mortgage. "It certainly is not a tick-for-tick situation, but I liken the movement of mortgage interest rates to that of a teeter-totter. If we see mortgage-backed securities gaining value, we will likely see mortgage interest rates decrease."

Santa Barbara City Council Advances Rent Increase Moratorium Amid Heated Debate

The Santa Barbara City Council held an extensive and emotional discussion on Tuesday, January 13, 2026, over a proposed temporary moratorium on rent increases.

The measure was proposed as a “standstill” to prevent tenant displacement while the city works toward a permanent rent stabilization program. City officials said the moratorium would provide immediate relief to tenants while allowing time to develop a long-term policy.
 

During the meeting, the City Attorney said the regulation is limited by the Costa-Hawkins Rental Housing Act, which restricts the types of properties the City can regulate.

As a result, the moratorium would not apply to housing that received certificates of occupancy after February 1, 1995; single-family homes and condominiums that can be sold separately; subsidized housing, including government-owned units and those with existing affordability covenants; or transient occupancies such as hotels, motels, and rentals of 30 days or less.

The ordinance sets the rent in effect on December 16, 2025, as the “base rent” for existing tenancies. The ordinance is temporary and will expire on December 31, 2026, or upon the adoption of a permanent rent stabilization program, whichever occurs first.
 

The City Council initially mulled over adopting the moratorium as an emergency ordinance, which would have enabled it to take effect immediately. However, the motion failed as it did not get the mandatory five-vote supermajority. 

The Council then voted 4-3 to introduce the moratorium through the ordinary process. Under this process, an ordinance is introduced during a meeting and is adopted at a following session. 

The City Council heard testimony for over three hours, reflecting a sharp divide on the topic in the community. 

Supporters, including tenants and housing advocates, argued that the city faces a housing emergency. Citing stagnant wages and increasing homelessness, they noted that there were more than 2,400 homeless individuals across Santa Barbara county. 

In contrast, opponents, including business groups and landlords, said the moratorium was not a genuine emergency and was a political maneuver.

Several landlords testified that surging operating costs, especially insurance hikes rising by 40% to 300%, utilities, and maintenance have skyrocketed and make rent freeze financially unsustainable. 

Opponents of the ordinance warned that such policies would reduce housing supply and discourage property maintenance. 

Opposition from Mayor Randy Rowse

Opponents of the ordinance included Mayor Randy Rowse, who called it “morally wrong” and “discriminatory” toward a section of property owners. Rowse also voted against the measure in both the emergency and ordinary forms. 
 

Criticizing the City Council for moving forward without “facts,” “data,” or “financial models,” Rowse said the Council was “playing with the house’s money” by gambling with residents’ investments, property, and futures without understanding its impact. 

He cited cities like Santa Monica and New York, where rent control programs proved unsuccessful or led to high administrative costs. 

Rowse also raised concerns about freezing rents while property owners are grappling with mounting costs.