Recap of the September 2009 Santa Barbara County Real Estate & Economic Forecast

The September 2009 Santa Barbara County Real Estate & Economic Forecast just happened last week, and here are some of the main points to take away:

• Dr. Mark Schniepp & his team 'are pegging the end of the national recession at about mid-summer' & stating that is was 'during the months of July and August that a spate of economic indicators showing positive growth began piling up.'
• Housing is recovering with both new and existing home sales rising and selling values finally stabilizing after 2 years of contraction.
• The stock market has rallied 49 percent since March 9, 2009.
• Manufacturing is now showing growth and expansion.
• Home builder sentiment is improving and housing starts are rising again.
• Credit spreads are easing.
• The leading economic indicator index is sharply rising.
• The GDP contraction during the 2nd quarter was only 1.0 percent.
• Monthly job losses are diminishing.

Dr. Schniepp states that 'if there is any good news for California and its component counties, it’s that the housing sector is in recovery. The “correction” in housing is complete and the overshooting which normally occurs following a correction is nearly repaired. We saw median selling values overcorrect downward, and sales overcorrect upward (due to the flood of REO homes). The cycle appears to be abating.' The negatives for California are the labor market & our state's budget troubles.

Regarding the housing market:

• Foreclosure levels have declined.
• Volume has increased.
• Inventory has subsided.
• Selling values have stabilized, even rebounding slightly.
• Notices of Default (NODs) remain at elevated levels.
• Fire sale prices will fade as more conventional home sales dominate the transactions.
• We will see a more normal market by 2010.
• Home selling values may have bottomed in February/March 2009 for Santa Barbara South County.
• Sales of condos in Santa Barbara South County have clearly rebounded (up 11% compared to last year).
• Financing with adjustable rate mortgages is at an all-time low, down-payments are sizable, financing with multiple mortgages is low, and non-owner occupied purchases are above average in some markets.
• The likelihood that mortgage rates will remain competitive into 2010 is high.
• For the second quarter of 2010, sales are expected to be 20% higher than they were during the second quarter this year ... and sales are expected to continue to expand into 2011.
  
• Prices are expected to bounce up between now and the end of 2010 as distressed sales no longer dominate the market.
• In a survey of home buyers, 74% of the buyers in Santa Barbara South County are still local (this number has been consistent over the past years) & only 1% of our buyers this year have been from foreign countries.
• In the same survey, first-time home buyers represented 25% of the sales in the first half of 2009, and 56% of these purchases were condos or mobile homes.
  
• Dr. Mark Schniepp states 'there is a clear V-shaped recovery underway regarding sales volume.'
• Year to date comparisons for the state of California indicate that 2009 home sales are 37 percent higher than last year. The rise in home sales this year is an extension of the trend that began in 2008, when sales rose 27 percent over 2007 levels.
• Most California counties are at their highest sales levels since late 2005.
• Home selling values have been rising in all principal regions of the state over the past few months.
  

So there you have it. I feel this is excellent information that can be used to guide your decisions. If you have any questions, want more in-depth information or if you would like to discuss your situation over the phone, please call me at (805)252-2773.