In markets across the nation, including California, the low inventory is driving up prices and causing some home buyers to enter into a bidding war for the perfect new abode. With supply low, many economists are urging potential home buyers to enter the market. According to a new survey by Lending Tree, the advice seems to be working.
The survey found home buyer confidence is up and many people are ready to get their feet wet this spring. In fact, 63 percent of those surveyed have a positive outlook on the economy for 2014, 69 percent believe the real estate market is looking up and a remarkable 71 percent are considering listing their home this year. While none of these numbers are solidified, it’s promising to see that nearly three-quarters of the U.S. population isn’t nixing the idea of selling their homes.
Since the recession ended, the real estate market has gone through a slow recovery, but the growth that took place last year puts the market in a prime position to boom in 2014. Take, for example, the Santa Barbara real estate market.
Santa Barbara Real Estate Demand
According to Altos Research, a real estate data analytics company, the median single-family home value increased in Santa Barbara during the last few months of the year. After starting the year with the median value around the $2 million mark, it dipped slightly for the first half of the year. During this time, the inventory was steadily increasing until it reached a peak of nearly 385 properties available in October. This was also the month of the turning point in price trends. As the number of properties available began to fall, the market was met with rising home prices. Altos reported that as of February 7, there were about 296 homes on the market with a median single family home value of $2,548,885.
This data shows that a drop in volume of inventory by less than 100 homes drove prices up by more than $500,000.
Simple supply and demand drives the real estate market no matter the region, and while high-end properties are expected in Santa Barbara, a price differentiation of $500,000 is still something to take note of. The Market Action Index, which measures whether the market favors buyers or sellers with a neutral value of 30, posted a 30.68, showing a pretty balanced market. Luxury markets tend to teeter around the neutral plane, but there was some measurable upward movement since the start of the year.
All of this information combines to show that the market in Santa Barbara is ready for the spring season to come into full swing. Buyers are prepared to pay more and the demand is there for homes. As more prospective sellers enter the market, the median home value may level out just a bit.
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(all data current as of 10/22/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.