The National Association of Realtors recently reported that U.S. existing-home sales soared 24.7 percent in July, outpacing their record growth of 20.7 percent in June, when the nation’s economic reopening ignited homebuying activity.
Now 8.7 percent higher year over year, the strong rise in existing-home sales, including single-family homes, townhomes and condominiums, is fueling optimism in the real estate market through the rest of the year. In the West, sales are up 30.5 percent, and the median home price ($453,800) is up 11.3 percent.
The South Coast real estate market also can be characterized as hot. Properties that are priced appropriately are selling quickly, often with multiple offers, and for more than the listing price.
“In terms of our real estate market, you would not know that we are in the middle of a pandemic,” veteran Realtor Bob Curtis of Village Properties said. “Prices are rising because of a very limited inventory of properties currently for sale. Sellers are motivated to take advantage of record-selling prices, and buyers are jumping into the market partially because of record-low interest rates.”
As more people are working out of their homes, the homes that they live in have become more important. People who can work remotely from anywhere in the world are also choosing to call Santa Barbara home. Some are moving to Santa Barbara to escape congested metro areas.
“Our market did slow dramatically once stay-at-home orders were issued during the second part of March and into April,” Curtis said. “However, starting in May, our market has heated up significantly. I think buyers are seeing the ‘light at the end of the tunnel’ and realize that the pandemic will ultimately end. They are also seeing that our economy has not crashed and consumer confidence has held as evidenced by a healthy stock market.”
Realtor Randy Freed, a top producer at Berkshire Hathaway, said, “The market is definitely wild right now with the lack of homes for sale and for rent. There should be at this time over 350 homes or planned unit developments on the market, and currently there are 272. Of those, 20 are priced under $1 million. We are seeing multiple offers on homes again because of a lack of inventory. Buyers are motivated, however, by incredibly low interest rates and wanting a better quality of life. They are leaving the big city to come to Santa Barbara and the Santa Ynez Valley.”
He said sellers aren’t selling for a few reasons:
» They have nowhere to go. The lack of inventory leaves little to choose from.
» They are concerned about the COVID-19 pandemic and having people come into their homes.
» Many people older than age 55 who want to move away and be closer to family will lose their property tax base because they are unable to transfer their tax base to their new property.
In addition to Realtors and builders, mortgage companies are also hopping.
Susan Bonanno, a mortgage adviser with Finance of America Mortgage, has been working from her home office since the pandemic shutdown.
“Yes, we are busier than before,” she told Noozhawk. “Of course, spring is always busier than Christmas/January/February in the purchase market. Purchases are busier than usual and so are refinances. Yes, it is a hot market. I’m seeing multiple offers over asking price.”
Bonanno said she thinks the reasons for the hot housing market are primarily low interest rates. People who have been successfully working from home are now able to buy a home wherever they want to live, instead of being limited to buying where they work. Plus, after spending time in quarantine, people who were not happy with their current living situation decided to change it.
In the most recent Fidelity National Title data report “July 2020 Market Trends in South Santa Barbara County,” the Montecito market was described as especially active. There were 15 sales in March and 42 in July. The median home price rose from $2.37 million in January to $3.05 million in July.
Jeanne Bradley, a Village Properties agent in the Santa Ynez Valley, said, “Generally with extremely low inventory, our sales numbers are much lower, but prices are higher especially in the low-end range. All price ranges have shown sales, which is unusual for our market. There is rapid appreciation in the low end and condos, which are usually the last to go up and the first to come down. We are now seeing higher pricing.
“The first-time buyer will indeed be paying much more than last year, as we have seen in some cases more than $50,000 higher closed pricing than just early this year before COVID.”
— Noozhawk contributing writer Rochelle Rose can be reached at rrose@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkSociety, @NoozhawkNews and @NoozhawkBiz. Become a fan of Noozhawk on Facebook.