Last week, local Realtors attended the Midyear Economic Forecast at our monthly Santa Barbara Association of Realtors meeting.
Mark Schniepp, director of the California Economic Forecast, which prepares forecasts and economic commentary all over California, presented a national, state and local real estate update. A graduate of UCSB and resident of Goleta, Schniepp’s insight into our local real estate market can be very valuable.
Last year, more than a few local Realtors expressed their concern over the positive outlook his report provided. Having been through the most difficult market many of us have ever seen, I recall the term Pollyanna was bandied about after his presentation.
Happily, his forecast was more accurate than any of us could have imagined. The gains in number of sales and equity increases have surprised and delighted. Since the value loss of up to 35 percent from the peak,we’re now back up 20 percent.
The number of distressed sales (bank owned, or short sales) have fallen from 32 percent of our market to 15 percent. The number of sales in Santa Barbara is up 12 percent, and the percentage would be greater if we had more homes to sell. In fact, things are looking up in such a short period of time that many of the skeptics are still concerned that we are heading into a “double dip” or another “bubble” situation. The question “Is the recovery real?” is on many people’s minds.
The increase in sales and values is not just local, but a national phenomenon, and in California we are second only to Utah in job growth with great gains in employment in professional services and tourism. Job creation, the lack of inventory and the dissolving impact of distressed properties indicate that we are gradually approaching recovery and a normal market in the next couple of years.
What to expect for 2014? Gradually higher interest rates, more inventory, a closer to standard appreciation and a good year ahead. It is such a pleasure to write these words, especially while I’m president! Stay tuned for more real estate information and market updates.
If there is anything on your mind that you’d like SBAOR to address, feel free to contact your local Realtor to bring the idea forward or contact the association with your questions or concerns.
— Laurel Abbott is a real estate agent with Prudential California Realty and president of the Santa Barbara Association of Realtors. Contact her at laurel@laurelabbott.com or 805.879.8050. The opinions expressed are her own.