All over California, real estate markets are experiencing a lack of housing for sale. Our inventory in Santa Barbara dramatically dried up in the last quarter of 2012. The release of REOs (foreclosure properties that are now an asset of a banking institution) have slowed to a trickle, and until the Mortgage Debt Relief Act was extended last week, there was basically a moratorium on short sales until sellers knew that those tax protections would be in place.
Even with the old adage “Real Estate is local,” equity sellers were likely holding back due to the uncertainty of our national economy. This lack of homes for sale has been constraining home sales in all sectors and many areas of California are reporting price increases. The lack of inventory is very evident in Santa Barbara. We currently have about 300 homes for sale between Carpinteria and Goleta, with just 50 in the under $1 million category.
What we haven’t seen yet is a measurable increase in home prices. How can this be? All over town, there are multiple offers and properties going over the asking price. I asked our man with the numbers, Gary Woods with Home Realty, for some backup from the stats on what we are seeing on the ground. He reported that of the 125 home sales in December, 26 were over asking price. As you can see by the graphs Gary provided, the median price remains basically unchanged year over year, but recent activity indicates that upward pressure is building.
This is such a unique market. It’s a great time to be both a buyer and seller. Buyers are still getting historically low prices and interest rates while sellers have a choice of qualified buyers. I venture to guess that many equity sellers are still holding on to the idea that spring is the prime selling time, but any Realtor in town will tell you we have a year-round market in Santa Barbara. There are ready, willing and able buyers now. Our median price hasn’t gone up yet, but clearly demand is high, and Economics 101 deems it inevitable.
In these complex times, it is more important than ever that you consult with your Realtor to see how this market can work for you.