Realtors: Tight inventory, higher prices for South County home market: 2014 begins with low supply and rising median price

1/26/2014
By STEVE SINOVIC
NEWS-PRESS STAFF WRITER

Home buyers may be having a tough time finding the right homes as low inventory, higher prices and greater demand are driving the South Santa Barbara County real estate market.

Amid scarce listings and surging prices, an active 2014 residential sales market from Goleta to Carpinteria clearly hinges on more inventory being available.

In late January, it was unlikely enough homes would enter the market to accommodate all of the willing buyers, said broker Gary Woods of Home Realty & Investments Inc., who is the official statistician for the Santa Barbara Association of Realtors.

So far, conditions favor the sellers who have listed their homes or condominiums.

Other potential sellers are still reeling from the holidays and gearing up for the Super Bowl, so it's slim pickings for buyers eager to jump into a market that is decidedly on the high end, observed Mr. Woods.

The spring and summer months, when the market typically kicks into high gear, should offer more indications of how the year is shaping up.

"That's when we should be off to the races," Mr. Woods added hopefully.

He worries that some sellers will be frozen in place, concerned that they may not be able to move up - essentially priced out of the market where there are fewer "deals" to be had, lending terms are more stringent and the interest rates are higher.

Selling a house is all based on confidence," Mr. Woods said. "There's not enough for the regular 'folks' in the $700,000-$800,000 range."

The self-employed, whose incomes may rise and fall, also face a quandary.

"Even someone with a good amount of money in hand can't make the loan," said Mr. Woods of the difficulties a few clients are finding in qualifying.

Such wokers don't have W-2 forms - the typical document lenders want to see before approving a loan - and many are reluctant to repeat the financing mistakes of the past.

During the sales caravans a year ago, Mr. Woods and his associates would see 18-20 houses for sale in Santa Barbara. On a recent caravan, they viewed six.

In Goleta, where eight to 12 homes usually are viewed, only four were toured.

"We started 2013 with 250 houses for sale, and this year it was 215, about 15 percent fewer," Mr. Woods said.

However, condo listings this year stand at 80. Last year, that category of housing numbered 48.

"The inventory we do have is very top heavy, meaning most of the listings are in the upper end," said Karen Spechier, a broker for Coldwell Banker, in her fourth quarter 2013 update newsletter.

According to Ms. Spechier's analysis, the majority of listings were more then $2 million, a category of real estate that is clearly out of reach for most buyers.

"Anywhere else in the country, that would buy you a home on a lake and a landing strip," quipped Mr. Woods.

Still, the local market is seeing multiple offers on homes and condos. About 25 percent of the 99 closed home sales in December went over asking price. For condos, around 11 percent were over asking price, she said.

Year over year, the continued low inventory is why the median price is up 19% for home ($945,000) and 17% for condos ($507,500), Mrs. Spechier said in her analysis.

The inventory crunch hasn't discouraged another category of customer: all-cash buyers. That's about 30 percent of the residential market, mostly second-home owners, Mr. Woods said.

Places like the Polo Field and Bonnymede condominiums are filled with homeowners who come to the American Riviera for a week or a month at a time, he said.

email: ssinovic@newspress.com

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