By RAY ESTRADA — Nov. 14, 2009
Since residential real estate sales usually decline in the fourth quarter of the year, a positive sign can be seen in at more South Coast transactions have occurred this October compared to the same month last year when the economic meltdown started, area experts said this week.
For the home estate and planned unit developments market in October 2009 for Santa Barbara, Montecito, Hope Ranch, Carpinteria, Summerland and Goleta 96 properties went into escrow, said Gary J. Woods, of Home Realty & Investments, who writes a monthly report on real estate trends.
“The first-time buyer incentive program ended, but now has been extended,” Woods said referring to the federal program that gave an $8,000 tax credit to first-time home buyers, which helped push home sales. He said another incentive program by Federal Home Administration also could be extended and also be a factor in the rising sales trend.
Woods said that might mean more South Coast real estate sales could be made during the last two months of this year, a period that usually yields very few.
The median sales price leaped from $750,000 in September to about $970,000 in October and the average sales price went up about $100,000 for the month to approximately $1.6 million, Woods said. However, he said median sales prices by month have been some what erratic, event though have generally risen since February.
Some national economists have said six months of continued growth in home sales might signal the country’s emergence from the worst recession since the 1930s.
Speaking at a Thursday panel discussion titled “The Financial Future of Our Central Coast,” Randy Glick with Prudential California Realty said, “It’s already getting better … We’ve hit rock bottom and we’re working our way back up.”
One of those attending the discussion, South Coast Realtor Ruth Ann Bowe in with Coldwell Banker, said there is no real scientific approach to real estate. “Our best approach is to analyze the history and watch the trends,” said Bowe, whose office is in Montecito. “This being said, the recent trends seem to point to a recovering market. The number of sales has increased consistently over the last several months, while inventory has declined.”
When the theory of supply versus demand is added into the equation, Bowe said, it also points to a changing market.
“The wild cards seem to be the continuing availability of affordable financing and the possibility of a new wave of foreclosures, although we haven’t seen as many in Santa Barbara recently as might have been expected,” she said.
Bowe agreed with Woods that the continuation and expansion of the buyers’ tax credit will probably help a little.
“We are seeing multiple offers over asking price on many well-priced homes in the lower end,” she said. “We are also seeing homes selling in the higher end. The key, if you have to sell in today’s market, is to make sure your Realtor helps you prepare and position your home properly to attract real buyers that will be encouraged to write offers.”
The longer a home sits on the market, Bowe said, the lower the buyer’s perception of value will be. The first few weeks are crucial to net top dollar for a home, she said. “If you are planning to buy, now is probably as good as it’s going to get – before everyone jumps back in when even less inventory is available,” she said.
The rise in both the median and average sales prices was cause by a decline in the numbers of sales below $1 million and an increase in the sales between $1 million and $2 million, Woods said.
However, Woods said, the “hot” market remains from $500,000 to $850,00 and is strong up to $1 million but there are just fewer sales in that price range while sales have risen from $1 million to $2 million and also gone up slightly from $2 million and more.
More than 100 properties came on the market during the month and for the first time in a long time the median list price for those new listings was below the median sold price for the month.
The overall inventory continues to decline, which usually happens in the fourth quarter, but the median list price for that inventory remains at about $1.8 million, Woods said.
For the remainder of 20009, sales figures should push past the 2008 numbers particularly with all the homes that remain in escrow.
Below $1 million prices are stabilized for now and from $1 million to $2 million they’re solidifying but above $2 million there is still settling occurring.
In another bright spot, Woods said sales remained strong in October for the condominium market with most of those transactions selling in the $350,000 to $700,000 range.
A handful of those purchases were more than $700,000 for the month with the highest priced condo closing for $1.4 million, he said.
Condo sales remained strong and moved ahead of the September 2009 figures. The median sales price dropped below $500,000, however, hovering around $460,000.
Prices are definitely hardening for the condo market with the sales price to original list price ratio right around 94 percent and the sales price to list price ratio only a couple of points higher at 96 percent, Woods said.
“To amplify what’s going on with condos the days on the market for sold properties slipped to around 75 days to get an accepted offer whereas in September the days on the market for ‘sold’ properties were closer to 90 days meaning it took buyers about a couple of weeks less time to make up their minds,” Woods wrote in his report.