It’s time to take a look at the market update for Santa Barbara County for the second quarter of 2016. Good news: Santa Barbara real estate market trends indicate real estate prices in Santa Barbara County increased by 2%. That represents the fifth straight year in Q2 that average sales prices have increase in the second quarter. Compare that to average sales prices in the market that dropped slightly compared to the previous year.
In the State of California, high prices held back sales volume. Here are some highlights:
- In the state of California, 41,200 new and resale home transactions closed escrow during May 2016. In step with the seasonal sales cycle, sales volume was up slightly from the prior month. This was roughly level with a year earlier, continuing a deceleration in year-over-year sales volume in recent months.
- 2015 ended with 450,700 home sales in California. This is 35,400, or 9%, more sales than took place in 2014. This is just above 2013 sales volume. For perspective, the number of homes sold in 2015 is still 303,203, or 40%, below peak sales volume experienced in 2005.
- The number of homes sold year-to-date is 3% higher than 2015, as of May 2016. However, this percentage has steadily decreased in recent months, and it’s likely 2016 sales volume will end level with or below 2015.
- Annual real estate sales numbers since the Great Recession of 2008 suggest the upcoming years through 2017 will be characterized by the same continuing bumpy plateau in home sales volume we have experienced now for eight stagnating years. As a rule, current market action, whether up or down, is reflected first in sales volume, followed by prices, and both fluctuate from month to month mostly going in opposite directions or just standing still.
- Sales volume will not increase significantly until after 2017, due to: fewer participating first-time homebuyers than normal; lower homeowner turnover to buy an upgrade or relocate due to continued negative equity and delayed retirement; and static turnover in rental occupancies.
- Much of these disadvantages are due to the jobs recovery which has been dragged out for eight years now due to a confidence issue, and is pronounced by wage increases below the rate of consumer inflation. California finally regained all jobs lost in the 2008 recession in mid-2014, but has yet to return to pre-recession employment levels after considering the 1.1 million working-aged population increase. At the current recovery pace this will occur in 2019.
If you live in Santa Barbara County, it’s time to let me help you with an in-depth evaluation of Santa Barbara real estate market trends prior to selling your home, or buying your next dream property. My comprehensive website will help you get started on the exciting path to purchase or sale, and I’ll be your guide the entire way. Call me at 805.886.9378 or email me at Cristal@montecito-estate.com. I’ll put my 20+ years as a real estate professional to work for you.