Posted September 20, 2011
“Steady resilience” seems to be what the first half of 2011 experienced in the real estate market. The median sales price was $839,950. This compares to $857,500 for 2010 and $850 for 2009 for the same period. This three- year trend in the median price, (down approximately 32% from the high of $1,250,800 in 2007), suggest a steady “foundation” has been established in our local real estate market. “Flat” is good for now, as we have to pass through this phase before we will see any appreciation return in the years to come.
Buyers have returned in steady numbers. Low interest rates and low prices have provided record-breaking affordability levels. This together, with average household sizes at record levels has created a demand for housing. There were 524 sales of houses and PUDs for 2011 through the end of July. This is the highest number of year to date sales since 2007. Pending sales, the most accurate reading of buyer confidence, was at 629 through the end of July. This is also the highest number for the past five years, up 16.3% from the same period in 2010.
Overall on the South Coast, there is only six months of inventory for houses and PUDs. This number is excellent when compared to the number in some inland communities in California who are wading through as much as 40 months of inventory. Goleta and Santa Barbara have only 4 months of inventory while the higher priced homes in Montecito have 13 months of inventory.
With current interest rates at historically low levels, and accompanying low prices, real estate is an excellent long-term investment. With the recent volatility in the stock market and the downgrading of the U.S. credit standing, “steady” and “resilient” sounds pretty appealing.