Wednesday, June 6, 2012

Santa Barbara Real Estate is Sizzling with Summer Sales

Santa Barbara is Sizzling!

The following is an excerpt from an article written by my Village Properties Associate, Jackie Walters, who is also a member of the Statistical Review Committee for the Santa Barbara Association of Realtors.

The sun is not only shining on Santa Barbara’s beautiful beaches and foothills but also the local real estate market. Simply put, sales are up strongly and inventory is down. Months of inventory for Santa Barbara’s South Coast, from Carpinteria to Goleta, is at a jaw-dropping 2.6 months; 2.8 months for houses and PUDs and 2.3 months for condos. (PUD stands for “Planned Unit Development,” free-standing homes in a housing association.)

Buyers are signing offers, writing deposit checks, negotiating great prices, and entering escrow in surging numbers. House and condo prices have become too tantalizing to resist, and qualified buyers, many with all cash, are jumping into the market without hesitation. The number of houses and PUDs entering escrow through the end of April 2012 was up a whopping 46% over the first four months of 2011. Closed escrows for houses and PUDs through the end of April totaled 340, the strongest start to the year since 2004! Sellers are getting closer to their asking prices than one year ago, 95.9% vs. 91.4%. (This is for most recent price before the property entered escrow, after any price reductions, not original asking price.)

Buyers in the under-$800,000 market, and sporadically in other higher price ranges, are now having to face the challenge of navigating the multiple-offer process. This is a head-spinning reality for buyers who have strategically been watching, waiting and timing their move into the market, only to find two, four or six other prospective buyers bidding on a property they have their heart set on. There is no magic solution to side-step this phenomenon. Buyers are advised to work closely with their Realtor, who will be able to let them know immediately when a property becomes available. Also, don’t give up! I have worked with many buyers over the years who have been disappointed on losing out on one property only to find something that they are even more enthusiastic about a few months later.

What’s going on with prices? The median price for houses and PUDs through the end of April is $785,000 which is down 3.1% for the same period one year ago. If one were to remove the two higher-cost communities of Montecito and Hope Ranch the median is down only 0.8%. Going back four years to the first quarter of 2008 the median price was $1,180,000, showing a drop of 33.5% to today’s median. For four years, 2005 through 2008, the South Coast median price for houses and PUDs plateaued right around $1,200,000; 2009 the median slid to $827,500. 2010 the median jogged up slightly to $840,000, followed by a median of $810,000 for 2011. For condos, there were 102 closed escrows year to date, giving a median price of $399,995.

All real estate is local. With the Pacific Ocean to the south and the Santa Ynez mountains to the north, Santa Barbara and its surrounding communities have negligible options for expansion. The supply of existing homes remains limited while the desire to live here has steadily increased over time. Unfortunately, there is no bell that rings when prices have reached “the bottom,” but a broader review of all the local real estate market indicators, together with the returned sense of buyer “confidence,” would suggest that’s exactly where we are. 

Thank you Jackie! At Village Properties, YOU ARE FAMILY!

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