The South Coast can no longer claim immunity from the home and mortgage crisis: Housing prices here have plummeted 20 percent in a year, dipping below the oft-mentioned $1 million median.
The news came as part of an annual report released Thursday by the California Economic Forecast, a Goleta-based economic consulting firm engaged in research and consulting support for business and public sector clients.
In the first half of 2008, the median selling home price on the South Coast was $940,000, down from nearly $1.2 million in the first half of 2007, according to the report, called the 2008 Santa Barbara County and Real Estate Update.
Excluding the wealthy Montecito and Hope Ranch townships — where gravity-defying prices actually have skyrocketed 13 percent this year, to a median of more than $3 million — the South Coast median selling price has fallen to $845,000, from a little more than $1 million a year ago.
The report comes at a time when the bursting bubble of California’s housing market has sent the state into a recession. Santa Barbara County, too, has been swept into it, according to California Economic Forecast director Dr. Mark Schniepp.
It’s not all doom and gloom.
“All that stuff with Fannie Mae getting taken over, AIG getting bailed out … and Bear Stearns getting bailed out — that’s going to help get the credit markets healed faster,” he said.
Still, recovery won’t happen overnight.
“It’s going to be a difficult rest of the year,” Schniepp said.
Countywide, the number of foreclosures hit record highs in August — with nearly all of them happening in the north county — but the downward spiral appears ready to level off, he said.
That’s because the “notices of default” that precede foreclosures appear to have peaked in April, and have fallen precipitously since. By Schniepp’s analysis, that means housing prices will start to bottom out in the first quarter of 2009, which, he said, should spur more sales.
“I’m looking for the second quarter of 2009 as a period of time in which we’ll see a surge in sales,” he said. “But we’ll never see appreciation like we saw in the last few years.”
That meteoric surge virtually doubled median home prices in the city of Santa Barbara in six years, to $1.2 million in 2007 from $644,000 in 2002.
Meanwhile, the majority (68 percent) of homebuyers in Santa Barbara County during the first half of 2008 hailed from the South Coast. Another 15 percent came from other California counties. About 2 percent came from abroad.
The rate of homebuyers who were either making an investment purchase or snapping up a second home is at the highest level it has been since the survey began in 2004. It has risen this year to 35 percent from 28 percent a year ago. About 16.5 percent of the purchasers were buying their first home.
As for population changes, Santa Barbara County — the 19th most populous of California’s 58 counties — this year grew 1.2 percent, which is just below the state average.
Since 2003, the county’s population has risen by about 17,000. However, all of the growth has occurred in the north county. The populations in the cities of Santa Barbara, Goleta, Carpinteria and Solvang shrunk in five years, though the report didn’t say by how much.
“Santa Maria will continue to lead the county in growth in the near future because the largest shares of approved and pending residential developments in Santa Barbara County are located there,” the report said.
Noozhawk staff writer Rob Kuznia can be reached at email@example.com.