Last Wednesday, Realtors and business members of our community attended the 2013 California Housing Market Outlook presented by California Association of Realtors chief economist Leslie Appleton Young.
The change in the market since last year is very dramatic. Housing is currently the strongest sector in the U.S. economy.
All over the state and particularly in Santa Barbara, the lack of inventory is driving the market. There are multiple offers in a variety of price ranges, cash investors are dominating the bids, and appraisals are lagging behind the values that buyers are willing and ready to pay.
Last year the buzzword that limited activity, scaring off a lot of first-time buyers as well as investors, was “shadow inventory.” With 29 percent of the mortgages under water, the “shadow” is real, but it is not flooding our market.
The threat is continuing to fade as the number of delinquencies and foreclosures fall to their lowest in six years. Banks did relieve some of their assets in bulk sales to investors, but those investors by and large are not reselling their acquisitions. A vast majority are choosing to rent these properties as the upward pressure of rental pricing continues.
The more than 2 million homeowners who owe more than their home is worth are holding on as they are finally having success with loan modifications or are seeing a return of their equity. Any Realtor would tell you they’d love to have more properties for sale.
This forecast is very positive for the coming year and more. The Santa Barbara market is very dynamic and has a number of “sub-markets” that really require expertise to be successful. Contact your local Realtor to advise you on every move you make!
Click here to view the 2013 SBAOR Economic Forecast presentation.