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Is it too expensive to retire in Santa Barbara?


We spent last week in Santa Barbara and we loved it. It’s such a beautiful relaxing town and it’s by far our favorite California spot. Of course, we are a little biased because we went to college there. It has changed a lot since I was a student though. I didn’t have any money back then and I was stuck on campus 99% of the time. Going through the engineering program was so stressful that I had more grey hair back then than now (I’m serious). It’s much nicer to visit without having to deal with the stress of campus life, grades, and paying for tuition.

We rented a house in SB this time because we were meeting up with our college friend’s family. Their daughter is just one day older than Little RB40 and we wanted to spend some time together. The kids had fun together, but boys and girls are so different. Little RB40 also doesn’t know how to behave around other kids and he shoved and hit quite a bit. We had to give him quite a few timeouts this trip. Oh, the house has a great avocado tree in the backyard, and it was fun to send our little “avocado retrieval specialists” to pick up newly fallen fruit. Fresh guacamole!

We had gorgeous weather the whole week and now we’re dreaming of retiring to Santa Barbara when we get older. It’s an expensive city though and I don’t know if we can really do it. Living costs are 122% higher than the average city and the median home price is nearly $900,000! I guess we could buy a 2 bed, 1 bath fixer upper for $400,000 and work on it…. I can dream, right?

Anyway, come along on our vacation and let me know what you think.

Santa Barbara Zoo – A nice little zoo perfectly sized for little kids. They have elephants, lions, giraffes, gorillas, flamingos, penguins, and a zoo train. Mrs. RB40 and I went here for one of our first dates nearly 20 years ago, so it’s sentimental for us, too. The $14 entry fee is a bit more pricey than what we’re used to though.

is it too expensive to retire in Santa Barbara Zoo

The Wharf – The pier is a nice place to stroll around. You can fish off the end of the pier or just hang out and relax. There is an aquarium here, some gift shops, and restaurants.

Wharf Is it too expensive to retire in Santa Barbara?

The Promenade – There is a nice long bike/walk path along the beach. A great place to get some exercise or to do a split.

Wharf Is it too expensive to retire in Santa Barbara?

Summer Solstice celebration – The Summer Solstice Parade draws up to 100,000 people and it is Mrs. RB40’s favorite parade.  Its main rule is that no written messages or banners with words are allowed. You won’t see any corporate sponsors here. The floats are human powered and most participants are from the local community, which really fosters a sense of local spirit.

Wharf Is it too expensive to retire in Santa Barbara? solstice parade SolticeParade3 SolticeParade1

The Super Rica Taqueria – a great authentic (and super-busy) taco joint that has been there forever.

Super Rica Taqueria is it too expensive to retire in Santa Barbara

We also went to the beach, visited UCSB, and a few parks. It was a nice relaxing family vacation without any stress. Santa Barbara has such a relaxing vibe and we felt right at home. Mrs. RB40 is not looking forward to going back to work. We really enjoyed our time there and as much as we like Portland, would love to relocate if we can.

Do you think Santa Barbara is too expensive to retire to? 

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, the job became too stressful and Joe retired from his engineering career to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle.

Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.

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{ 49 comments… add one }
  • Reverse Engineer April 7, 2018, 4:03 pm

    One of my former co-workers moved from Sacramento to Bodega Bay in 2015. Not sure how he pulled it off, since he was just a worker bee like me. Probably invested better than I did. Looks like a terrible place to retire.

  • Helen June 19, 2014, 12:38 am

    I know SB is expensive if you wish to purchase a home, but what about apartment rentals? I’m from the San Francisco Bay Area and not only are the homes here are at stratospheric prices but the rental market is staggering. I have looked at the apartments in Santa Barbara and they still have reasonable offerings. Food and gas comparable …. seems that Santa Barbara could offer a Bay Area Transplant a nice life…even on a reasonable budget.

    • retirebyforty June 19, 2014, 3:09 pm

      I haven’t checked the rents, but I don’t think it’s cheap. If you compare it to the Bay Area, then you’re probably fine. The Bay Area seems crazy to me. How can a regular person afford to live there?

  • Winn July 12, 2013, 9:44 pm

    Fell in love with SB too, but the housing prices, growing snob factor, and traffic made it a bad permanent choice for us. While wine tasting we fell in love with Paso Robles just up the coast and inland. Gorgeous. You should definitely check out SLO and the surrounding beach towns. It’s a very special area!

  • Paul @ The Frugal Toad July 1, 2013, 10:38 am

    I stayed at a house on the beach in Pismo Beach for a month while I was working for Westinghouse during the refueling outage at Diablo Canyon Nuclear Power Plant. I spent some time in Santa Barbara and housing was out of site back then and still is! San Luis Obispo was one of my favorite places to hang out!

    • retirebyforty July 1, 2013, 10:44 pm

      I haven’t spent much time in SLO. Next time we’ll stop by for a few days. Pismo beach is nice, but I think it’s very expensive there too, right?

    • JayCeezy July 4, 2013, 7:22 am

      @Paul, Avila Beach (between Pismo and SLO) where the DCPP is near, used to be a quiet, local beach town full of old cottages. Not sure when you worked on the outage, but about 10 years ago Chevron had to pay to remediate the town (replace all the contaminated soil and rebuild, repave, new utility infrastructure). Wow, the place is looking great and shiny and everything works, but the homes average more than double! (of course the sq. footage is also more than double!).

      The biggest problem w/Central Coast for my wife and myself, was that there were very few good paying jobs. Quite a few students like to continue living in the SB and SLO area, and don’t mind working in the restaurants at night while they slack during the day. A great lifestyle for those it suits. But for the rest of us, we have to bring our money to be able to live there.

      • retirebyforty July 5, 2013, 12:40 am

        Yeah, the job is a big problem. Working for the universities might be one way, but I don’t think they pay that much.

  • Little House July 1, 2013, 7:13 am

    Many years ago Mr. LH and I checked out Santa Barbara and really liked it. However, after browsing through the real estate we realized it wasn’t a possibility for us – it was just too darn expensive. Also, the town has a sleepy quality to it during certain times of the year. Though it’s a great place to visit, living there doesn’t work unless you have boat loads of money. 😉

    • retirebyforty July 1, 2013, 10:37 pm

      Sleepy quality? That’s a plus in my book. 🙂
      Who knows, maybe we’ll get lucky with the lotto…

  • Retired Syd June 29, 2013, 2:01 pm

    I didn’t know you went to school there–that’s where my husband and I went also! (Although a few years ahead of you, I’m sure.) It is so fun to return from time to time for a visit and reminisce, isn’t it?

    • retirebyforty July 1, 2013, 12:02 am

      It’s so nice to visit now that we have a little money. 🙂 UCSB has such a nice campus and it’s a lot of fun to walk around and see the new buildings.

  • thepotatohead June 28, 2013, 10:24 pm

    $900k median for a house….yeesh, where I live that would buy you an estate with many many acres. Even $400k would put you in a mcmansion. I think visiting Cali would all I’d be able to afford at the moment lol.

  • Mrs. Waste Not June 28, 2013, 8:58 am

    The question is, not is it too expensive, but is it too expensive for you….

  • Prasun Choudhury June 28, 2013, 12:39 am

    Just curious, did you go to Solvang, the Danish town in central CA during your stay at Santa Barbara? I was there on a Christmas eve and it was a very festive atmosphere with a somewhat European feel (and not the mention, the awesome Danish pastries!).

    • retirebyforty June 29, 2013, 3:29 pm

      We stopped by Solvang for a Danish when we went wine tasting. We’ve been there before. 🙂

  • steve June 27, 2013, 9:35 pm

    Isn’t there a nice marina in Santa barbara? What about living there on a sailboat?

    • retirebyforty June 27, 2013, 10:34 pm

      I’m all for that, but I’ll be living there alone. 🙁

  • Pauline June 27, 2013, 7:37 pm

    I love CA but the price of real estate is really too high, I’d rather be in a not so fancy area and holiday there once a year, that would be much cheaper. My friends who live in Paris barely enjoy the city on a daily basis while I do during a month holiday.

    • retirebyforty June 27, 2013, 10:33 pm

      I guess you’re right. We can do a home swap or something. Most CA really enjoys Portland.

  • BARBARA FRIEDBERG June 27, 2013, 4:57 pm

    We lived the first 10 years of our marriage in San Diego. (very expensive) When our daughter was small we moved to more affordable places and built up a large net worth and had a wonderful “family” environment to bring up our daughter. Now that she is grown, we’re back in expensive N. Ca and loving it! Bought a condo in a middle class neighborhood and have the opportunity to hit the beach or SF on the week ends. Our condo will be paid off in 14 years.

    • retirebyforty June 27, 2013, 10:33 pm

      Sounds like you made the right choice for your family. Great job!
      Maybe we can end up in SB eventually too. 🙂

  • Pension Retirement June 27, 2013, 3:51 pm

    You’re forgetting any tax increases that you may have by moving to California (if you don’t live there anyway, in which case there is ample opportunity cost for not moving out of state). Yes, the housing costs are high, but that is tre of many large cities too. I personally wouldn’t want to be on the hook for so much of the budget mess in California via property, sales, and income taxes. I have enough of that with only 2 of the 3. 🙂 And in portland, you don’t have sales tax, to add another 10% to your cost of living.

    • retirebyforty June 27, 2013, 10:31 pm

      Yeah, the sunshine tax is high in CA. I knew that… Thanks for bursting my bubble. 🙂

    • Matt June 28, 2013, 4:11 pm

      Oregon has a higher income tax than California unless you make over $500k per year. Also, it has a higher property tax and can increase 3% a year, while CA can only increase 2% per year. No sales tax is nice, (it is 8% in Santa Barbara County) and doesn’t cover many things like food and services. If you don’t buy a lot of big ticket items, the lack of sales tax probably doesn’t make up for the increased property and income taxes in Oregon.

      However, the cost of living is much more in Santa Barbara and unless you have a bunch of equity in your Oregon house to roll over into a property, it probably isn’t too realistic.

      • davidmichael June 29, 2013, 11:03 am

        About Oregon…I have lived here for over 30 years. Rarely paid high taxes because we had a small business with lots of tax benefits. Now in retirement, we haven’t paid any taxes to the state because there are lots of exemptions for seniors, our income has dropped a great deal, and we sold our big house. I love Oregon! Not having a sales tax is a total winner. And, yes. The property taxes are high, like $2000 a year for a $150,000 property in the city of Eugene and less in the county. But…we have the Oregon Ducks and the University of Oregon. I love this place! I can fish for trout in our front yard on the Willamette River or a few miles way on the McKenzie, and be in the National Forest about 15 minutes out of town. But most importantly, the traffic sucks in Southern California. Too many people, too many cars, too many freeways, and too expensive living. I’d say…rethink Santa Barbara. Is all that finanical stress and crowding really worth it in retirement?

        • retirebyforty June 30, 2013, 11:59 pm

          That’s great to know. This is the first year that I’m self employed and I was paying high tax previously. I always thought I’d have to move after retirement to avoid the 9% tax, but if there are a lot of senior tax breaks then maybe we could just stay here…
          One of the thing I like about SB is the lack of traffic. It’s much better there compare to the rest of CA. LA and the Bay Area are way too busy for us.

        • ElisabethJ January 31, 2019, 7:07 pm

          It sounds like you have a great place, David! I just might visit. Santa Barbara is amazing though. We don’t have traffic and can walk to a lot of places rather than drive and the weather really is perfect. Our rent is high for the size but who needs a big place when, like you have, gorgeous nature is right out the door. I can see the mountains from my living room and walk to the beach and we pay very little in utilities. It’s not perfect but I do hope to stay here a while longer. When retirement comes, we may have to rethink everything but I will cross that bridge when I get to it.

          • retirebyforty February 4, 2019, 9:49 am

            We need to visit SB soon. We haven’t been there for 6 years. 🙁

  • krantcents June 27, 2013, 1:32 pm

    If I am literally exchanging my overpriced home for another, no problem. Unfortunately, I am better off staying in Los Angeles county. I can keep my old tax assessment in retirement that way. BTW, I went to Super Rica many year s ago when my kids went to UCSB. I think that makes me feel old! Last fall, my wife and I stayed at a B & B in Ventura and did a day trip to Santa Barbara. We dinner on the pier. We also stayed at B & Bs in Santa Barbara and I enjoyed bicycling all over town. It is a great place for a break.

    • retirebyforty June 27, 2013, 10:29 pm

      The tax assessment is a huge part of the equation. That’s why I’m thinking it might be a good idea to get a fixer upper so the purchase cost is lower. Do they recalculate the assessment after a big renovation?

      • JayCeezy July 3, 2013, 8:01 am

        @RB40, re: tax assessment – yes, the new value is recalculated, and used as the basis for Property Tax. A good multiplier to use is 1.18% (the basis is 1%, but additional bond obligations that you probably didn’t vote for, serving municipality, county and state are all tacked on). So, a $1 million home would have a Property Tax bill of about $1,000/month. Wow, right?

        btw, old joke alert: “Santa Barbara is the place where old people go…to visit their parents!”

        My wonderful wife and I just spent 7 years in nearby Ojai (much hotter, about 10 miles inland), and would not recommend it. S.B. is the best of the Central Coast, if you can swing it financially. SLO is a college town, with lots of noisy young temporary residents, and lots of tourists; very hard to live a quiet and private existence there. Morro Bay is quite crowded now, with small setbacks and a big tourist presence. All fun to visit, but as residents we were unable to duplicate the lifestyle we enjoyed as visitors. Maybe BabyRB40 will attend UCSB like you, and you can visit?

        • retirebyforty July 4, 2013, 12:41 am

          I was looking at the property tax and it seems so cheap. Thanks for clearing it up for us.
          We’ll have to evaluate our option again in 10 years or so, but we really love it there.

  • Lisa E. @ Lisa Vs. The Loans June 27, 2013, 12:31 pm

    Santa Barbara looks gorgeous. I’m sure it’s pricey, but I’m sure you guys will find a way to make it work! Maybe live in the next town over?

  • Joe @ Stacking Benjamins June 27, 2013, 12:17 pm

    Your pictures look marvelous. A parade without sponsors? Awesome….and looks creative.

  • Dividendpassiveincome June 27, 2013, 12:12 pm

    Wonderful place for vacation. I am glad that you all had a good time in SB.

    Yeah, SB is one of my dream places to live in too. But the living expense is very high indeed, at least I can’t afford it. It’s good to go there now and then for relaxed vacations though 🙂

  • Matt June 27, 2013, 11:32 am

    Santa Barbara is a great town, but definately quite expensive. Lots of wealthy people retire there and bid up housing costs, and there is little room for the town to grow with mountains on one side and the ocean on the other and an overall anti-growth attitude. Probably close to $1M for a decent house.

    I like the Central Coast myself too, but probably more like Morro Bay or SLO given the costs.

    • retirebyforty June 27, 2013, 10:25 pm

      Yeah, a lot of money from the entertainment business bid up the houses. We walked around in the area where we rented and saw many multimillion dollar homes. I’ll have to research SLO more. I know Pismo beach is very expensive too.

  • Rob @FinancialSprout June 27, 2013, 9:15 am

    Well, if you were to strike it rich in the lottery, then anything is possible! Wouldn’t it be a little more practical if you were to retire of a suburb of Santa Barbra, where the cost would be much less? 400,00 for that small of a house is outrageous! That is the price of my house, which is 5,000 sq ft! To me it is a little too expensive to retire in SB, but if you can afford it, then go for it! It’s your dream, go for it.

    • retirebyforty June 27, 2013, 10:22 pm

      I just have to start buying some tickets. There aren’t much suburb of Santa Barbara. They are all quite expensive in that area. Once you get up a little more north, it’s pretty empty. I’m not sure who own that area. That might be a good option.
      That’s $400k for a small fixer upper. It’ll probably need A LOT of work.

      • Prasun Choudhury June 28, 2013, 12:37 am

        Very true; I think Goleta, Ventura (in the other direction) are all expensive. In north, to get things a bit cheaper, you probably have to go up to San Luis Obispo (~90 miles north of Santa Barbara) but then the fun & comfort of staying in Santa Barbara is no longer there!

  • nicoleandmaggie June 27, 2013, 4:39 am

    I think the weather in heaven must be patterned after Santa Barbara. I lived there for two years growing up– my mom said the rent on our apartment in Goleta went up every month we lived there. But we could walk to the beach.

    As for retiring… taxes will be high, but your income will be lower, so they may not hit you so hard. In places with lots of public amenities you can spend less on things like entertainment. But you may not be able to enjoy some of the private amenities like eating out. CA does have prop 13, so if you buy a house, your property taxes can’t go up so much, but if you’re buying a house when you retire, you’ll still be stuck with the point in time taxes which are likely to be high since SB has already been discovered.

    Still, my parents are thinking of retiring to CA, though Portland would probably be more affordable.

    • retirebyforty June 27, 2013, 10:19 pm

      Rent going up every month is pretty crazy.
      We were just talking about living cost. I doubt we would be eating out much. The nice restaurants are quite expensive there.
      I don’t know if there are any undiscovered community left in CA… We’re born a bit too late.
      Maybe SLO?

      • nicoleandmaggie June 28, 2013, 4:21 am

        San Luis Obispo isn’t the same. You’re better off in Portland!

        Besides, Portland is supposed to have the same weather as SB in about a century if global warming trends keep up.

        • retirebyforty June 29, 2013, 3:29 pm

          Hahaha, we’ll see if I can make it to the 22nd century. 🙂

  • simple living June 27, 2013, 2:14 am

    That is very expensive and living in Sydney Australia, I have to deal with the same thing. Are there any fringe cities that are cheaper but allow you to get into SB quickly? The beach community where I currently live is similar; $1.2m for an old un-renovated 2 bed 1 bath house. Moving to a adjoining suburb, the prices come down to about $900 but you get a bit more house with 3 beds 2 bath.

    Its the whole lifestyle verse location debate

    • retirebyforty June 27, 2013, 10:17 pm

      I haven’t really research much, but my friend told me it’s not much cheaper in Goleta, the nearby community. I’ll have to research a bit more.

      • Eric June 28, 2013, 2:48 pm

        Carpenteria is one town over and quite a bit less expensive. I know a few people who live there.

      • Katie Teall April 8, 2019, 2:36 pm

        Unless you were lucky enough to buy back real estate in the 80-90’s as an average Joe in Santa Barbara forget it. You can’t even buy a manufactured home for under 400k and that’s on the low end.
        Rents are sky high and availablity is slim to none. Property taxes are expensive also.
        We were lucky enough to buy our house in1993 for 350 k . It’s now worth over 900k.
        Expensive living in Paradise!

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