Since the 2011 trough in land prices, the worst markets in the Bay Area have seen a significant increase in lot prices – an average of about 44%. As the available land in the core markets has dwindled, builders have turned to the tertiary markets that were once off the radar. This trend will likely continue in areas such as the Central Valley and Monterey and Sonoma Counties. Although they may be considered unbuildable zones today, they will see a similar lot appreciation over the next few years as builders move farther out of the core to build.
The Central Coast’s South Santa Barbara County submarket, which includes Carpinteria, Santa Barbara and Goleta, has seen a surge in sales volume to date with 199 closed transactions this past October. Sales volume is WAY up and our trend line has now officially bounced above our 2005 sales volume numbers. With all of this activity our current median price of $620,000 has also bumped up 2% from this time last year leaving us with one question … Where is the future inventory going to come from? With thinning resale opportunities and virtually no foreclosed homes on the market prices are sure to jump again over the next six months.
So what does this mean for Central Coast home builders looking for land opportunities along the Central Coast? Finding the right land position has traditionally been very difficult in this supply constrained market so if you are a home builder looking to build along the Central Coast, please contact Matt Power at Land Advisors Organization’s Santa Barbara office at 805.845.2660.
Source: Matt Power, Senior Marketing Consultant, (805) 845.2660