The real estate market has certainly seen its share of changes along with new activity over the past several months. From increases in inventory to higher interest rates to newly implemented mortgage qualifying guidelines. These changes make good argument that sales should start slowing down.
We can track how fast a housing market is moving by measuring its absorption rate or market velocity. This is done by dividing the number of homes now available by the number of homes that have gone under contract over the past month. The ratio tells how long it would take for all homes on the market to sell at the current rate of sales.
Here’s a look at Santa Barbara’s current market velocity and how each price range has changed since last February.
For Homes and Condos:
Under $500K: 2.7 months of inventory (up from .3 months (9 days))
$500K – $1M: 2 months of inventory (up from 1.2 months)
$1M – $1.5M: 2.3 months of inventory (down from 2.7 months)
$1.5M – $2M: 11.2 months of inventory (up from 3.3 months)
$2M – $4M: 20.2 months of inventory (up from 8.7 months)
Over $4M: 21 months of inventory (down from 38 months)
Traditionally 1-4 months of inventory indicates a seller’s market, 5-6 a neutral or balanced market, and 7 or more a buyer’s market. Santa Barbara’s current numbers show a seller’s market for properties under $1.5 million and a buyer’s market for properties over $1.5 million.
For a more in depth look at the market you’re interested in I appreciate and look forward to your inquiries.
Four of the ten highest priced real estate zip codes in the United States lie in California according to CNN Money Magazine. Second in California is 93108 which encompasses homes in both Montecito and Santa Barbara. The only zip code with higher prices in California is 90210 in Beverly Hills. The determination was based on the number of home sales of $5 million or more over the last 12 month period ending June 30th. Although Beverly Hills had more ultra-high end home sales than Montecito, Montecito’s median price of $2.4 million eclipsed the median in Beverly Hills by $400,000.
The article mentioned Montecito’s Mediterranean climate and cool Pacific breezes creating perfect weather as a big selling point. This certainly helped in the recent sale of 1755/1745 Fernald Point priced at $28 million. A modest 3 bedroom 4.5 bathroom house on 3.16 acres with building plans for a larger home.
You don’t have to purchase a property in the high priced 93108 zip code to enjoy what many consider to be the best living accommodations in California. There are nine other zip codes in and around Santa Barbara to choose from, and most currently have median home prices under $1 million. I look forward to providing you with great buying opportunities in all of Santa Barbara’s beautiful locations throughout the year and appreciate your inquiries.
With 60 to 70 degree temperatures and plenty of sunshine forecast for the next two weeks it’s hard to think of a more pleasant place to look at real estate this time of year than in and around Santa Barbara. The only dilemma buyers are having is whether to choose from the limited supply of homes currently for sale or wait to see if inventory levels increase as the year progresses. Last year Santa Barbara’s home inventory reached its peak in October, while in 2012 and 2011 the peaks happened in February and July respectively.
Long time watchers of the real estate market in Santa Barbara pretty much agree that if a property becomes available that’s reasonably priced and close to meeting your needs don’t hesitate on making a decision. Chances are that the longer you’ve been looking for a particular property the more built up demand there will be from other buyers for the same home. When multiple offers arise it’s not uncommon for a long awaited property to sell for over the asking price to an all-cash buyer.
There’s no time like the present. Low interest rates, off-peak competition, and a reasonable number of homes to choose from. The current conditions may be just what you’ve been looking for. I appreciate your inquiries and the opportunity to be of assistance.
The Santa Barbara real estate market recently saw its slowest November and December as per number of homes sold since the big dips in 2007 and 2008. The lack of sales for these months can largely be attributed to the record low inventory levels that buyers had to contend with. The consensus from just about every long time Santa Barbara Realtor I’ve talked with in the past 6 months is that recent inventory levels are the lowest they ever remember.
The number of home sales Santa Barbara produces this year will definitely depend on the amount of inventory that becomes available. Documentation from the Santa Barbara Multiple Listing Service (MLS) shows that there were only 424 active listings two weeks ago for homes, condos, and land combined. Today the total is 453, a nice 7% increase, but far off levels reached in 2011, 2012 and 2013 when the number of listings rose to 958, 715, and 616 respectively.
Smart investing is said to be counterintuitive, which in real estate translates to: when no one else is buying you should buy, and when no one else is selling you should sell. The current housing conditions are certainly enticing then for savvy buyers and sellers to become more active. If this happens we can surely bet that this year’s sales numbers will be better than last.
I appreciate your inquiries and look forward to keeping you posted on what’s gearing up to be a very good year for the Santa Barbara real estate market.
Last year saw quite a rebound for the Santa Barbara area real estate market, not to mention the rest of the country. In the combined areas of Carpinteria, Summerland, Montecito, Santa Barbara, Hope Ranch and Goleta, median prices rose 17% for homes, from $826K to $968K, and 27% for condos, from $400K to $510K. The highest gain for homes was in North Goleta at 28% and the lowest in Hope Ranch at 5%. For condos the highest gain was in South Goleta at 46% and the lowest in Montecito at 6%. The City of Santa Barbara saw gains of 24% for homes and 32% for condos.
How is Santa Barbara’s rebounding real estate market fairing with the rest of the country? In a USA Today article published last week it stated that in October U.S. home prices were up 12.5%, putting them 20% off their 2006 peaks. By comparison Santa Barbara area’s home prices were up 16%, putting them 32% off of their 2005 peak of $1.275M. The article also mentions that in 2014 prices should rise more slowly due to an increase in inventory and rise in interest rates. Santa Barbara is certainly under the same interest rate constraints as the rest of the country, but inventory level is another story. The consistently low supply of available homes that Santa Barbara is known for gives potential to significantly higher home price increases than the rest of the country.
As we head through 2014 I’ll keep you well informed on Santa Barbara’s inventory levels and prices, along with many other home trends that affect the market. Your feedback and inquiries throughout the year are much appreciated and I look forward to hearing from you.
There are many reasons why Santa Barbara area real estate buyers and sellers have decided to wait until next year to pursue a purchase or sale. With the lack luster amount of inventory Santa Barbara experienced this year, many buyers were either unable to find their perfect home or were out bid on homes that finally surfaced which met their needs. Periods of uncertainty in the economy coupled with widely fluctuating interest rates and tough loan qualifying standards also helped to lessen buyer motivation. Expectations of higher inventory levels and more stable economic conditions for 2014 have added to the desire of a lot of buyers to wait.
Sellers have also been feeling that their patience will be a virtue. Steadily increasing prices along with a stronger economy point to higher sale profits next year. A reemerging jumbo loan market with less lofty lending standards is also expected to provide fuel for more high-end sales during 2014 in the Santa Barbara area. Instability in the jumbo loan market was a major contributor to the less than spectacular overall sales volume that Santa Barbara experienced in 2013. The current year-to-date median home sale price of $968,000 requires a buyer with 20 percent down payment to obtain a jumbo loan.
Given these market conditions it looks like much activity is set for next year. I welcome all of your inquiries and appreciate the opportunity to assist you with your real estate endeavors in 2014.
During the recent Santa Barbara County Real Estate and Economic Outlook Conference held in November interesting market trends were looked at regarding where buyers are coming from and where sellers are moving to. Information was taken from over 421 local sales that took place during the first half of the year. Over 60 percent of the sales were produced by the number one real estate company in the area, Village Properties.
Here are some of the highlights.
• Two-thirds of all Southern Santa Barbara County homebuyers came from the region, while out-of-area buyers purchased the remaining one-third.
• Fifteen percent of the buyers were from out-of-state and less than one percent were from out-of-country.
• Twenty-five percent of sales were from first time buyers.
• Twenty-six percent of sales were investment and secondary home purchases.
• Sixty-nine percent of purchasers were employed locally, while the rest were retired, unemployed, or employed in other areas.
• Seventy-one percent of sellers stayed in the region.
• Forty-five percent of sellers downsized.
These trends are mostly consistent with years past. The two categories that changed the most were on the selling side. 1) There were a considerably larger number of sellers that stayed in the region and 2) There were a smaller number of sellers that downsized.
Part of what makes Santa Barbara such a wonderful and desirable place to call home is its wide variety of people and real estate. It’s been a long time pleasure of mine getting to know both and having the privilege to serve in bringing the two together. Thanks for your inquiries and the opportunity to assist you with any of your needs.