The lack of inventory continues to put upward pressure on Santa Barbara real estate prices. The low availability of entry level priced homes has also slowed sales in the under $1 million price range. Currently there are only 63 homes available in the Santa Barbara area, stretching from Carpinteria to Goleta, priced under $1 million. From the end of October to the end of December Santa Barbara usually sees inventory levels drop by 25% or more. That being the case there will only be 50 or so homes available in the under $1 million price range by the end of the year.
C.A.R.’s 2014 California Housing Market Forecast was released a couple of weeks ago and states that the median California home price is predicted to rise 6% next year after experiencing a staggering 28% increase this year. Santa Barbara’s year-to-date median home price increase currently measures 16%. Areas that were hardest hit by the recession have seen their median prices increase the most in California. This makes sense because their low end inventories are even less available than in more affluent areas such as Santa Barbara.
Some of the main contributors to the low inventory levels are: 1) Housing affordability is at historic highs. 2) Low rates are impacting other investment alternatives. 3) There’s been little new construction over the past 5 years. 4) Underwater homeowners are not selling. 5) Foreclosure sales are at low levels. 6) Investors are renting instead of flipping. 7) Off-market pocket listings are growing.
With low inventory and higher median home prices it’s important for buyers and sellers to be prudent about their choices and consult with their experienced real estate professional. For more information on available housing inventory, pocket listings, and important market trends I look forward to and appreciate your inquiries.