Central Coast: Full Sails Again for Santa Barbara Realtors

Spring flowers are blooming, the Pacific Ocean breeze is blowing, and South Santa Barbara home sales activity is picking up!  Central Coast resale agents are finding themselves busy again.  Traffic, escrows, listings and pricing in certain areas are all up, kicking the Central Coast’s spring selling season into gear.

The Beautiful Santa Barbara Real Estate Blog reported… Santa Barbara Real Estate through the end of March ‘12 for Montecito, Hope Ranch, Santa Barbara, Goleta, Carpinteria and Summerland:  Comparing the first 3 months of 2011 with the same period in 2012, sales are up about 35% with escrows up over 50% and the median sales price is up bit while the average sales prices is down a bit. Year-over-year the Sales Price to Original Price ratio is within 2% of where it was last year and the Days on the Market for sold properties is within 12 days of where it was in 2011.

An example of the Central Coast’s uplifting sales activity is City Ventures’ East Beach Collection in Santa Barbara.  The 48-unit attached townhome project is seeing impressive sales, with only 5 more to go before completion.  The project has sold 15 homes in 2012 (5 per month!).  The City Ventures marketing team attributes the strong homebuyer interest to the project’s unique location, quality product and the limited supply of new product currently available in the marketplace.  The East Beach Collection is four blocks from Santa Barbara’s famous State Street and four blocks to the ocean.  With no amenities and surrounded mostly by office buildings, the project is in the new hip, up-and-coming area (also referred to as the “funk zone”).

Source: Matt Power, Senior Marketing Consultant, (805) 845-2660

New Normal: Design Does Matter

Take a look at the recent potential small-lot single family projects in the Bay Area and you might notice an interesting trend… while most people would expect the average sales price for a typical small-lot single family home to track lower as the home is placed on a smaller lot, there is a point at which the home-buying market no longer differentiates between lot sizes.

Homebuilders selling homes on a 6,000 square foot lot versus a 5,000 square foot lot see a large difference in cost and purchase price, and the same goes for builders selling homes on a 5,000 square foot lot versus a 4,000 square foot lot.  However, right now in the Bay Area, when a builder drops its lot size below 4,000 square feet, the market levels out.  The design on the inside of the house dictates fluctuations in cost and asking price, not the lot size.

For example, during the peak of the homebuilding market in 2006 in San Ramon, floor plans were of less importance to attracting loads of eager home buyers.  But in today’s highly competitive marketplace, any perceived inefficiency in a floor plan can result in a house being passed by.  The current market environment is giving homebuilders the opportunity to create innovative and attractive floor plans on small lots in high density areas that were overlooked in previous market cycles.

Homebuilders looking to reach the ever-prized “qualified home buyer” need to focus on differentiating their new home communities more on the house itself and less on lot size.  Now, more than ever, they need to focus on the “livability” of the product from a floor plan standpoint.  In high density areas like the Bay Area, the way every square foot is used can mean the difference between big margins or big yawns.  All is not lost though; we can help point clients in the direction of new architectural innovations that allow formerly inefficient site and house plans to be reworked into projects that can meet the demands of today’s discriminating new home buyer.

Source: Steve Reilly, Marketing Consultant, (925) 368-3128