Ever heard of someone saying “when things are on a roll…enjoy it while it lasts, ‘cause it never does.” Well, I guess you could apply the same logic to interest rates.
Looking at how the tear land values have been in the last 12 months, it seems things are starting to cool off and the industry is taking a collective breath. When the Federal Reserve Chairman speaks and hints at future actions regarding interest rates, the market is clearly listening. In case anyone missed it, interest rates have risen for the better part of 100 basis points since May causing new home sales to slow and robbing buyers of purchase power, which illustrates that the housing recovery is still fragile and changes need to be addressed delicately as we move forward. That being said, I think home buyers are realizing that low-interest rates will not last forever and they should engage while they can.
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