Weekly Real Estate Snapshot 7/12 - 7/18

New Listings: 40
Price Improvements: 47
Pending:  19 breaks down to:
under $1 million: 11
$1-2 million: 3
$2-4 million:2
$4-8 million: 1
$8 million+: 2
Closed: 13
Off Market (expired, canceled, withdrawn):  20
Back On Market: 11

SOUTH COUNTY REAL ESTATE MARKET ON STRONG REBOUND

STEVE SINOVIC, NEWS-PRESS STAFF WRITER

July 9, 2010 5:44 AM

South Santa Barbara County's residential real estate market has managed to

tread the troubled waters of the economic downturn and is now making a

double-digit rebound.

That was the message delivered Thursday by economist Mark Schniepp, who

gave a decidedly more upbeat mid-year economic update to 200 members of

the Santa Barbara Association of Realtors at the Cabrillo Arts Center. He said

home sales are up 22 percent from the same six-month period (January-June)

of a year ago: 428 transactions. The median price, less Hope Ranch and

Montecito, was $855,000, up 17 percent from last year's rock-bottom median

of $730,000.  Like many other regions in California, "We're doing better than we did last year at this time," said Mr. Schniepp, principal of the California Economic Forecast. "Last year was completely different because many people were concerned about their day-to-day business operations and wondering if they would have a job."

Consumer confidence was very low and people were scared to make large

purchases. According to a survey conducted by Mr. Schniepp's office, about 30 percent of the home and condo sales in the first six months on the South Coast were to investors. "Certainly, some of these are people of means who are coming in to purchase second homes or rentals," observed Mr. Schniepp. "But we've also

seen a lot of first-time home buyers taking advantage of lower prices, interest

rates and tax credits -- especially for condos in the 400s."

Of the 400-plus transactions, Mr. Schniepp said 38 percent were over $1

million; approximately 42 percent were under $800,000. "We haven't had that

many (in this price point territory) since 2002," said Mr. Schniepp.

That's where the market's hot right now.

Statewide, California median home prices are up 32 percent from the trough.

For those who can afford to purchase homes in south Santa Barbara County,

Mr. Schniepp calculates about 25 percent of the transactions are cash sales.

Those who need to acquire mortgages are finding tighter lending requirements

where jobs, good credit scores, down payments and co-signers are part of the

equation, even at the lower end.

Mr. Schniepp said potential home buyers now can secure a 4.57 percent

interest rate on a 30-year mortgage. "That's a historical low compared to what

it was 10 or 20 years ago," he said.

But all the news he presented wasn't good. Economist Mark Schniepp points to a chart highlighting a rebound in home prices and sales activity in south Santa Barbara County.

While some may be ready to take the home buying plunge, South Coast residents, including many of the real estate agents present, aren't convinced the recession is entirely over, thanks largely to chronically high unemployment.

"It's not surprising you feel that way, but the recession ended a year ago," declared Mr. Schniepp, who displayed a dozen charts showing growth in key areas of the economy. "Unlike previous recessions, there are just so many fits and starts, especially on the jobs front," said Mr. Schniepp, who said the economy has managed to register three consecutive quarters of growth to its gross domestic product. "We're seeing consumers spend again, but not in the numbers following earlier downturns. They are just tiptoeing back into

stores.

"The stock market is up 70 percent over the low, but we've seen some weaknesses and corrections lately, thanks in part to the dubious news about the European debt phenomenon that is weighing on (some) investors." Will that contagion affect us? Mr. Schniepp believes, barring an unforeseen event, that it won't derail the U.S. economic recovery and push us into a double-dip recession.

The dearth of significant job creation is causing all the gloom, especially concerns of how the private sector will absorb 8.3 million Americans who lost their jobs in a brutal two-year period back into the economy. Complicating the recovery are 70 million Gen Yers, the cohort born after 1990, and looking to enter the job market. "We haven't had this demographic phenomenon" in past downturns, said Mr. Schniepp, adding Santa Barbara labor markets are weak, and he doesn't predict any significant uptick until the end of the year and into 2011.

"The current year is a bumpy one, a transitional one," said Mr. Schniepp, echoing a sentiment from previous presentations. Signs of "a more exuberant expansion" will be felt in 2011 and 2012, when higher employment figures, continuing home

sales and increased construction will be significant contributors to economic growth, said Mr. Schniepp.

For more information about Thursday's presentation, contact mark@californiaforecast.com.

e-mail: ssinovic@newspress.com

Santa Barbara Real Estate through the end of June 2010

Each month a very generous and talented colleague, Gary Woods compiles all the Santa Barbara Multiple Listing and Cort sales data and provides many of us in the real estate industry with a synopsis of the current market.  Thank you Gary, as always your expertise and data is very appreciated!  

 Including Carpinteria, Summerland, Montecito, Hope Ranch and Goleta.

Looking at the Home Estate/PUD market for the greater Santa Barbara area from Carpinteria/Summerland to Goleta including Montecito and Hope Ranch for the first 6 months of ’10 the numbers of sales for June was 81, down from 86 in May and 89 in April. The Medium Sales Price was up slightly however going from $902,500 in May to about $915,000 in June. But, the average sales price did drop from the previous month going from $1.425 million in May to about $1.25 million in June. This decline in the average sales price was due to a fall in the numbers of homes that sold over $1 million and an increase in the sales below $1 million.

Comparing June ’09 to June ’10, the sales are about the same with 85 in ’09 and 81 in ’10 but the median sales price has gone up substantially from about $795,000 last year to $915,000 this year. What has also gone up is the numbers of escrow rising from 84 in ’09 to over 100 in ’10. The median list price on those escrows did not go up a lot however with ’09 having an $829,000 median list price for opened escrows and ’10 showing up with an $885,000 median list price for escrows opened in June.

The inventory is up from the previous month when there were about 615 Home Estate/PUDs available for purchase with a median list price of about $1.7 million to about 650 Homes on the market in June with a $1.6 million median list price

Looking at the Districts, Carpinteria/Summerland home sales are up with 35 this year compared to 26 last year and the median sales price has drifted upward from $643,000 in ’09 to $675,000 in ’10. What has dropped substantially this year is the numbers of escrows falling from 39 in ’09 to 27 in ’10. This means that most of those sales that were racked up this year were actually put into escrow last year.

Montecito has seen 57 sales this year compared to 52 last year and the median sales price has risen slightly from $2.33 million in ’09 to $2.48 million in ’10. But, compared to Carpinteria/Summerland the future looks bright in Montecito because the escrows are up from 54 in ’09 to 72 in ’10 with the median list price on those escrows holding solid at about $2.6 million for both years.

East of State St sales are way up from 74 last year to 112 this year with the median sales price rising from just under $900,000 last year to about $960,000 this year. The escrows are also way up this year so things should continue surging forward in the area.

On the West Side of town the numbers of sales are up from 78 last year to 86 this year with the median sales price also going up from $735,000 last year to about $815,000 this year. Escrows are also way ahead of last year so just like the East Side things should keep going on the West Side.

In Hope Ranch sales are up from 7 to 10 this year with the median sales price going from $2.55 million to $3.23 million. But, it looks like things have stalled in the area because escrows are holding at 11 this year compared to 10 last year with the median list price on those escrows in ’10 falling to just under $2 million.

For Goleta South sales are up from 45 last year to 51 this year but the median sales price has dipped from $700,000 last year to $650,000 this year. It looks like things are slowing in the area with escrows just slightly ahead of the ’09 pace but on the up side the median list price on those escrows is right about $700,000.

            Goleta North sales are up from 73 in ’09 to 83 in ’10 with the median sales price also rising from $704,000 last year to $735,000 this year. The escrows are way up however going from 78 in ’09 to over 100 in ’10.

            For the Home Estate/PUD market sales are remaining in that mid 80s range for the month with the median sales price still hovering around the $900,000 range for June.

           

For the Condo market in the Santa Barbara area there were 33 sales in June down from 37 in May but up from 32 in April. The median sales price also fell for the month from $467,000 in May to $439,000 in June. The average sales price dropped substantially however falling from about $600,000 in May to about $500,000 in June.

In June ’09 there were 43 sales compared to the 33 in June ’10 but the median sales price last year of $455,000 has remained rather stable for about a year. But, when you look at the period from Jan. 1 to June 30 there were 130 sales in ’09 compared to 168 this year while the median sales price slid down from $467,500 in ’09 to $437,000 in ’10. For June ’10 most of the sales were concentrated below $550,000 with only 6 of the 33 sales above that mark and no transaction above $1 million.

Looking at the Districts, Carpinteria/Summerland has 36 sales this year compared to 19 last year but the median sales price has dipped slightly from $400,000 in ’09 to $393,100 in ’10. The escrows are also way up from 23 last year with a median list price on those escrows of $420,00 to 35 this year with a median list price of $409,000.

In Montecito there have been 10 sales this year with a median sales price of $1,062,500 compared to only 1 sale last year for $679,000. The escrows are also up from just 1 in ’09 to 12 this year so sales should remain substantially ahead in Montecito for the foreseeable future.

On the East Side Santa Barbara there have been 38 sales this year compared to 29 last year but the median sales price has dropped from $505,000 last year to $442,500 this year. The escrows are only slightly ahead this year with 38 compared to 33 last year with the median list price on those escrows going down from $539,000 in ’09 to $499,000 in ’10.

For the West Side condo sales have gone up from 29 in ’09 to 40 in ’10 but the median sales price has dropped from $520,000 last year to $496,000 this year. The escrows are also up from 36 last year with a median list price of $519,000 to 49 this year with a median list price of $515,000.

Goleta South condo sales have dropped from 32 in ’09 to 24 in ’10 with the median sales price of $419,500 last year down to $357,500 this year. The pending properties are also way down from 44 last year to 28 this year. This decline in activity is because of the lack of inventory in the area. Right now there are just 6 condos in Goleta South available for purchase with a median list price of $519,000.

Goleta North condo sales are right where they were last year with 20 in both years and the median sales price is also solid with $408,500 in ’09 compared to $405,000 in ’10. The escrows are also very close together with 30 last year and 29 this year as is the median list price on those escrows with $399,000 last year and $419,000 this year.

The inventory came up slightly in June with 147 available properties and there were 55 new listings occurring in the month showing up with a median list price of about $480,000 which is very close to the median sold price of approximately $440,000 when you consider the Sales Price to Original List Price Ratio of 90.37%.

With Home Sales remaining in the mid 80s and condo sales in the mid 30s for the month things look like they’re going to keep going for awhile especially when you consider the over 100 Home Escrows opened in June. The condo escrows are not piling up however but just matching the numbers of sales. But without an expanding inventory this is to be expected. The median sales price of homes is up slightly from $830,000 last year to about $860,000 this year over the 1^st 6 months while the condo median sales price is down from $467,500 last year to $437,000 this year.   

 Gary Woods

Weekly Real Estate Snapshot 7/5 - 7/11

New Listings: 42
Price Improvements: 59
Pending: 20 breaks down to:
under $1 million: 14
$1-2 million: 5
$2-4 million: 0
$4-8 million: 1
$8 million+: 0
Closed: 24
Off Market (expired, canceled, withdrawn): 29
Back On Market: 9

7 Things All Borrowers Should Know About FHA Loans

RISMEDIA, July 3, 2010—FHA Pros, LLC, a national FHA condo approval service, has developed a list of facts speaking to the top misconceptions associated with FHA loans in order to help home buyers better navigate an already confusing market. FHA loans are mortgages issued by qualified lenders and insured by the Federal Housing Administration (FHA).
“We have seen home buyer interest in FHA loans go from practically zero three years ago to upwards of 87% today,” said Christopher Gardner, founder and president of FHA Pros, LLC. “Despite this rapid rise in popularity, many buyers still do not fully understand the benefits of these loans, and we believe it’s time to change that.”

1. FHA loans are not only for lower-income borrowers. FHA loans are available to everyone. There is no maximum income restriction associated with FHA loans, but borrowers do need to substantiate income and assets by submitting proper documentation. This requirement ensures that borrowers are well-vetted and truly able to afford their future homes.

2. FHA loans are not only for first-time buyers. Many people believe FHA loans are available only to first-time home buyers, but this is not the case. Whether borrowers are making their first home purchase or their fifth, they can look to FHA loans as a home financing option.

3. FHA loans are not just small loans; in fact, loan amounts can be as high as almost $800,000. The government recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market. The amount a buyer can borrow varies from county to county though. Later this summer, condo buyers interested in FHA loans can visit www.checkfhaapproval.com to instantly identify FHA-approved condo associations and review maximum loan amounts for a given location.

4. FHA loans are not affiliated with the section 8 housing program. While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing. FHA loans are simply mortgages insured by FHA. This insurance provided by the federal government allows lenders to lend more freely by assuring them that they will be repaid in the event of default. Most traditional lenders, including Wells Fargo & Co., JP Morgan Chase and Citigroup are able to provide FHA loans to their customers.

5. FHA loans are often more affordable than conventional loans. While FHA loans typically offer the same interest rates as other loans, borrowers benefit from a much lower down payment of as low as 3.5%.

6. FHA-approved condo developments are more desirable to buyers. With 87% of home buyers indicating that they plan to use FHA loans, condo associations that are not FHA approved are missing out on a significant pool of prospective buyers. Under rules in place since February 2010, an entire condominium development must now apply to HUD and be granted FHA approval before a buyer can purchase a unit in an association with an FHA loan or before an existing unit owner can refinance into an FHA loan.

Due to the general unwillingness of today’s lenders to extend credit with respect to conventional loans, many borrowers find that FHA is their best bet. Lenders don’t mind lending when the federal government (FHA) assures them of repayment.
Homeowners associations (HOAs) should note that although FHA-insured mortgages might be easier to obtain, they are not “risky” loans, due in large part to the strict “full documentation” requirements placed on borrowers. Individual buyers or sellers can initiate the approval process or current owners can encourage their HOA to apply.

7. FHA loans are assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable. This means that when a seller with an
FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable in times of rising interest rates.

“Now, more than ever, buyers and sellers need to understand the options available to them when it comes time to buy a home,” continued Gardner. “At FHA Pros we have worked with countless HOAs, attorneys and individuals to easily and efficiently navigate the historically tricky FHA-approval process.”

An Update From My Dad about His Ranch

Hi E,

Thought you might enjoy some pictures that show what I have been up to since our solar system was destroyed by the lightning strike several months ago.  We are fine tuning it now.  We have so much wind and solar that SCE will have to adjust their transformers to accept it.

Yesterday the wind generator produced 160 kw hours of electricity and the solar panels produced 60 kWh (and they were turned off for two hours during the day.)  Monthly production should be somewhere between 4000-6000 kWh of production.  Normal residential house uses 500 kwh/month.  Yesterday in a single 24 hour period we generated 220 kWh.  My electric meter makes a complete revolution (going in reverse) every two seconds. 

The Bergey wind generator starts to produce at 5 mph and tops out at 12kwh of production when it reaches 23 mph (which is a mild breeze for us)  The tail begins to furl at 33-35mph.  When the wind is howling at 30-40 mph and the sun is bright the energy being produced is really quite awesome.  I feel a little bit like the professor who created Frankenstein.  This creation is alive now, and when fully engaged is quite impressive. 

Currently (har har....the pun was intended) we are producing more power than the SCE lines can accept.  When everything is in full production mode the voltage on the line is so high that the safety features on the wind generator shut it off line.  We are in the process of fixing this issue.  Apparently our production plus the production from our neighbors 100 panel installation is more than anticipated. 

I am also installing solar panels to (A) pump air into the koi pond to oxygenate the water and keep the fish healthy, and (B) pumping spring water from the back property up to the pond, to insure that the water level will remain constant during the dry summer.  Our original spring has almost dried up and can no longer keep up with the evaporation and seepage that reduces the pond water level.  

Love,

Dad

Weekly Real Estate Snapshot 6/28 - 7/4

New Listings: 64
Price Improvements: 37
Pending: 31 breaks down to:
under $1 million: 26
$1-2 million: 3
$2-4 million: 1
$4-8 million:1
$8 million+: 0
Closed: 24
Off Market (expired, canceled, withdrawn): 37
Back On Market: 10

Weekly Real Estate Snapshot 7/26 - 8/1

New Listings: 49
Price Improvements: 68
Pending:  26 breaks down to:
under $1 million: 21
$1-2 million: 4
$2-4 million: 1
$4-8 million: 0
$8 million+: 0
Closed: 24
Off Market (expired, canceled, withdrawn):  28
Back On Market: 5

New Certified Homes Command 18% Price Premium

New Certified Homes Command 18% Price Premium in  2009-2010 More Than One in Five Homes  Achieve a Sustainability Standard   PORTLAND, Ore., June 16, 2010 - While fewer new homes were built in the past year in the Portland metropolitan area than in the previous year, the market share of third party certified homes increased. Twenty three percent (23%) of all newly constructed homes in the Portland metropolitan area sold between May 1, 2009 and April 30, 2010 received a third party certification. This finding is based upon data reported by the Portland area RMLS to Earth Advantage Institute. The term "certified home" refers to homes that received an Earth Advantage, Energy Star, or LEED for Homes designation, or a combined Earth Advantage/Energy Star designation. Certification and sales information is reported by participating real estate brokers to RMLS. The Portland metropolitan area region includes Multnomah, Clackamas, Columbia, Washington and Yamhill Counties in Oregon and Clark County in Washington.   This finding continues a three year trend in which the market share of certified homes in the Portland region has increased. Please see Table One below for detail.    Homes with a third party certification sold for more than their non-certified counterparts, both in the new home and existing home markets. New homes in the six county Portland region sold for 18% more, while existing homes with a certification sold for 23% more. "As energy efficiency and healthier homes gain more attention, builders and homeowners increasingly place value on home certification," said Sean Penrith, executive director, Earth Advantage Institute. "It is very encouraging to see the market share of certified homes continue to rise over the past three years despite the difficulties in residential markets."   RMLS reports sales data by county. Table Three below provides more detailed information on the range of price premiums observed in different parts of the Portland metropolitan area. Clark County, WA was the one area in the metropolitan region where newly constructed certified homes did not sell for more. However, certified existing homes in Clark County continued the trend. As a group, existing homes with a sustainable certification in Clark County sold for an average of $278,400 versus $234,100 for homes without such a certification, or 16% more.     The Portland area RMLS first began collecting information about home certification in the spring of 2007. It is the first RMLS in the country to do so.   About Earth Advantage Institute Earth Advantage Institute works with homeowners, homebuyers, builders, and developers to bring the most energy efficient, sustainable, and healthy homes to the market. The organization is an independent, nonprofit resource group that certifies homes and communities based on conformance to ENERGY STAR®, Earth Advantage®, or LEED® for Homes standards. Earth Advantage Institute also offers education classes and has a showroom at its national center in Portland, Oregon. Earth Advantage Institute has certified more than 11,000 new homes. Earth Advantage Institute would like to thank the Portland Regional Multiple Listing Service for its assistance in compiling this information. For more information, contact Tom Breunig, Director of Marketing tbreunig@earthadvantage.org (503) 968-7160 x 36.

emPower becomes a reality

emPowerSBC, Santa Barbara County’s new energy financing program, is a reality.  County staff are busy finalizing details before they’re ready to accept the first round of applications.


Last Friday the Santa Barbara County Board of Supervisors approved the 2010-2011 budget, thereby allocating the necessary $5M in funding to emPowerSBC!  This accomplishment is very much due to the support you provided along the way, either at Board hearings, through letters to the Supervisors, or in personal meetings with County staff and decision makers.  On behalf of the Community Environmental Council, where we believe emPowerSBC will help our County become Fossil Free by ’33, we’d like to THANK YOU for your dedication to this program.  We couldn’t have done it without you!

The program is now a reality and the County staff are busy finalizing details before they’re ready to accept applications.  Visit www.empowersbc.org to find out more and to register for email updates.

Why did we support emPower?

emPowerSBC, is the most significant opportunity to invigorate the building and trades sector in Santa Barbara County history. Yet this job creation program is threatened by the County’s estimated $41M budget shortfall in 2010-2011. There will be stiff competition in next week’s budget hearings for every dollar allocated.

emPowerSBC, as authorized under AB 811, will create a thousand or more local jobs as contractors incorporate energy efficiency and renewable energy generation products into existing residences and commercial buildings.

emPowerSBC enables the property owner to amortize clean energy upgrades for up to 20 years through a line item property tax assessment - minimizing out-of-pocket expense while realizing long-term energy cost savings.

emPowerSBC requires only $5M funding. The $5M in ‘seed’ money is then leveraged through bond financing to create $160M in energy upgrades and jobs. The funding and bonding that supports the energy upgrades is secured by voluntary property assessments on the upgraded properties.

emPowerSBC is already recognized as the most sophisticated and easily manageable program of its kind in development. It will be a model for hundreds of similarly challenged communities where job loss stalls economic recovery.

• emPowerSBC Center South
• 105 E. Anapamu Street, Suite 105
• Santa Barbara, CA 93101
• Telephone (805) 568-3566
• Monday-Friday: 8:00am - 5:00pm