Monday, January 25, 2016

CALM's Antiques, Decorative Arts and Vintage Show January 29, 30 and 31st

29, 30 & 31, 2016

Friday and Saturday 11 a.m.-6 p.m.

Sunday 11 a.m.-5 p.m.

At the Earl Warren Showgrounds

3400 Calle Real, Santa Barbara, CA
(Highway 101 at Las Positas)

Tuesday, January 19, 2016

Greater Santa Barbara Area Real Estate Wrap-up for 21015

Real Estate Market Wrap-up for 2015

We have now put 2015 behind us and are looking forward to a great new year!  But, for the real estate market, it is good to look back and see what transpired and maybe be enlightened as to where the real estate market is headed.

The information provided below covers only the south coast of Santa Barbara County – Goleta through Carpinteria.  Also, when “houses” is used, it refers to single family residences and Planned Unit Development units. 

Reviewing the number of sold listings in the graph below, there were more houses that sold in 2015 than the year before.  This reflects about an 8% increase of sales compared to the previous year.  It was not the best year on record, but it was a good, solid number of sales. 
But then looking at condos, 2015 had the highest number of sold condos in the last 15 years!  Granted, some of these are brand new units but those do not account for additional 119 units sold compared to 2014.  This reflects a 27% increase of condo sales compared to the previous year.

There is an interesting anomaly about our median sales price for houses – see graph below.   Overall, it appears that the median for houses has gone down compared to 2014.  This could be somewhat disconcerting at face value, but what you cannot see in the graph is the median for each specific area that we track.  The median has actually gone up for all the areas except Carpinteria/Summerland. 
Here are the year-end medians for each area for the last two years:
So if the areas actually have higher medians, why is the overall less?  First of all, there were quite a few more sales in 2015 compared to the year before.  Remember, the median is the point where half of the houses sold for more and half sold for less.  With this additional amount of sales, it can change the balance of the median price.  Note that the city of Santa Barbara, which has the most sales of all the areas, has the same median as the overall median price.  Even though Montecito and Hope Ranch properties are more expensive, they are just 18% of all the sales in the area.  Carp/Summerland and Goleta represent about 37% of all sales and their medians are below the overall median price.

On the other hand, the overall median for condos is higher – up 6.7% from the year before.  The newer units tended to be pricier than some of the conventional condos in town.  It will be interesting to see how the median will fair this year with little or no large developments being constructed.

The following compares the number of closed sales of houses over the last two years by price range. 
There has been an increase of sales for those properties priced at over $4,000,000.  Not only have prices gone up, but more affluent people are interested in investing in Santa Barbara area real estate.

Inventory is still low and has not changed much from the beginning of 2015.  We anticipate it to pick up and provide more variety to serious buyers.  As you can see on the “Santa Barbara South Coast 2015 MLS Market Activity” chart below, the Months of Inventory (which is the time that it would take to sell all of the existing inventory in an area) is under three months for Santa Barbara, Goleta and condos in general.  Higher end homes tend to take longer, hence the eight months for Montecito.

The following gives you an idea of the price ranges where the available inventory resides:
Manufactured Homes

There’s another segment of our market that gets over-looked and that is the sale of manufactured homes. There were 101 sales of manufactured homes in 2015 – very close to the count of 103 sold in 2014.  The median price for these was $269,000 in 2015. That is almost a 29% increase from the year before.  The sold prices ranged between $74,000 and $499,000.  There are currently 15 manufactured homes in escrow.  But what is truly noteworthy is that across this whole area, there are only 12 currently available to purchase.  Of the 101 sales in 2015, 13 of them were regarded as “pull-outs” or noted as needing to be replaced.  These older ones are being replaced with newer, more energy efficient units that have the look and feel of single family homes.

Interest Rates

As you may know, the Federal Reserve has finally raised the Fed Funds rate from effectively 0.0% to .25%. This was widely expected because the central bank believes that our economy is strong.   It may not seem like much, but it will affect millions of Americans.  There is a possibility that they could further increase during 2016, as much as a full percentage point.  But the Fed indicates that they will be patient so as not to hurt the economic recovery.  This is the first increase since 2006 and it has been as 0.0% since December 2008.

A negative with an increase in the Fed Funds rate is that mortgage rates may start to creep up, though rates are still at or under 4% at this time.  There could be some benefits with this rate hike.  One of those benefits could be higher returns for savers such as CDs and money markets that could produce more interest income for the elderly.  Another benefit is that this could help strengthen the U.S. dollar even more, especially against the euro, which then would give U.S. travelers more buying power. 

One indicator that the Fed will closely watch will be the inflation rate which they target at 2%. Currently, it is close to zero.  They assume that it may not hit the target until 2018.  The other indicator is the unemployment rate which is nationally at 5%, though in 2009 it was at 10%.  Over 12 million jobs have been added since the recession ended.   They are expecting unemployment to go down to 4.7% during 2016.

RE Market – 2016

There does not seem to be any apparent down side to the Santa Barbara area real estate market.  The modest increases in median prices across the areas still look appealing to serious buyers.

A concern is the weakening of the Chinese stock market. This has affected the Dow Jones in which it lost 6% over last week.  If the Chinese market continues to slip, our markets will reflect that and will not provide buying power to some of our potential buyers.

If the Fed continues to raise the Fed Funds rate, then mortgage rates will begin to go up.  It would be prudent for any buyer that is on the fence to get off and start looking for a property to purchase now.

As far as our crystal ball can tell right now, it is a great time to purchase or sell real estate in this area. There are more people buying real estate as investments.  Where else can you get such a great return?  If you are thinking of selling, buyers are anxious to see what is new coming on the market – you could be the next sale!  Be sure to contact your Village Properties Realtor® who can guide you through the process. 

As a final note, Village Properties is proud to be #1 for the fourth year in a row in total sales volume in the Santa Barbara area!  For 2015, our sales volume was $1,319,173,888


Monday, January 4, 2016

Hottest Real Estate Markets!

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