It’s probably no surprise that roller-coaster real estate markets like Phoenix and Miami are in roaring rebound mode this year, but Santa Barbara?
Who knew? Sometimes called the “American Riviera” for its red tile-roofed estates overlooking the Pacific, year-round great climate, active cultural life and its movie star residents, Santa Barbara took a significant though little publicized hit during the real estate bust, with median home list prices plunging from $1,667,500 in September 2007 to $649,000 this May.
But here’s the latest news: this May’s median list price in Santa Barbara – low as it may appear compared with the peak — was actually 30 percent higher than the same month last year, and nearly one-fifth higher than April of this year. Total home sales in May were double the year earlier. Pending contracts were up by nearly 80 percent.
Numbers like these rank Santa Barbara as the second hottest metropolitan real estate market in the U.S. after only Phoenix, according to a new survey by Realtor.com, based on data from hundreds of local Multiple Listing Services around the country. Local real estate brokers say the market is so fast-paced that virtually any realistically priced home that’s listed is being snapped up. New listings are selling 20 percent faster than they were a year ago.
So what’s going on in Santa Barbara? Probably several things simultaneously. For starters, there’s a severe scarcity of inventory. The number of homes listed and available for sale in May was down by 34 percent compared with the year earlier. Unlike 2005 and 2006, when sellers stood in line to list at seven figure asking prices, there aren’t so many houses for sale today in Santa Barbara.
Another factor: Although its median list price puts it behind only San Francisco ($699,000 median) among California’s largest luxury markets, there is a recognition that Santa Barbara is a very special place, and that underlying real estate values very likely will rise faster here in an improving economy than elsewhere. Not only is Santa Barbara special locationally and in cultural terms, it’s also special – at least for California – in terms of employment. Metropolitan Santa Barbara’s unemployment rate is nearly 3 percentage points lower than the California statewide rate (8.2 percent in May compared with 10.8 for California as a whole.) Consumers with good local jobs can afford the $649,000 current median asking price for homes, and they are signing contracts to buy a piece of this jewel by the sea.
Bottom line: Don’t be surprised if Santa Barbara prices keep moving up faster than most other markets. And if you’ve ever wanted to live there or purchase property, this could be one of your last shots in a long while to pick up real estate coming out of a deep cyclical low.