Thursday, August 28, 2008

Santa Maria Purchase Loans Outnumber Refinances, WOW!

I am not quite sure how to interpret the fact that in July the number of Purchase Loans recorded in Santa Maria outnumbered the Refinance Loans.

Let me compose myself and think this through. Here are some of the facts.
  • The purchase market in Santa Maria has been going gangbusters
  • The median home price has been declining
  • Lending standards have increased significantly
  • Interest rates remain low
O.K. I think I've come to my senses. Refinancing is not possible in this area for a number of reasons. A couple of the biggest reasons are that there is no equity in their homes and documenting of income has made it more difficult to qualify.

With respects to the purchase market, I don't think I'm saying anything too awfully revealing when I say "The market is back!". Even though many of the sales are properties that are bank owned, the buyers have figured out that they are a bargain. I know investors are stepping in and buying property in Santa Maria as well as folks who are looking for a roof over their heads.

Will we see refinancing come back? I think it will pick up some, but it won't be the boom we saw a couple of years ago. Lenders just aren't going to allow people to qualify as easily as they once did. This is good for everyone, especially those folks that are buying properties now. It protects their investment from the huge swing in prices we have experienced recently.

Monday, August 25, 2008

What Do All These Foreclosure Numbers Mean Anyway?

Following all the related foreclosure numbers like I have been for the last 2 years certainly doesn't make me any expert. It really helps me to see what is happening when I can view a chart allowing me to view trends one way or the other.

The numbers for July in Santa Barbara County are intriguing to say the least. I know real estate is a very local commodity when all I read in the headlines these days is how Notice of Defaults are continuing to rise and Santa Barbara appears to be bucking the trend.

Santa Barbara County had a significant drop in the number of Notice of Defaults the County Recorder reported for July. An 18% drop causes me to think that if that keeps up this will be fantastic for the Santa Barbara Real Estate Market. So, will it?

That is the 64 million dollar question! Here are the facts, the number of Trustees Deeds have been on the rise, the number of REO's selling have been on the rise, and the number of loans adjusting have also been on the rise.

I believe the leading indicator has to be The Notice of Defaults recording. That starts the entire process of foreclosure. If they continue to decrease then so will everything else mentioned above.

I know this may be an optimistic viewpoint, but maybe just maybe all the effort being put in to keeping people out of foreclosure is beginning to work. I can tell you that the number of loans adjusting in November and December of this year is 160 and 123 respectively. That is a lot lower number than in 2007. That would appear to bode well when it comes to seeing the Notice of Default number declining.

The more I look at this chart and the numbers I've been tracking, the more I am beginning to believe the claims that we are seeing or have seen the worst of the foreclosures in Santa Barbara County.

I did hear a report today that the number of homes sold across the country increased over 3% from June. Maybe this is the start of some positive news on the real estate front.

Friday, August 22, 2008

Where Have All The Refinances Gone?

Refinancing your home was definetely at the center of the economic party a couple of years ago. Not any more, the number of refinances in the Santa Barbara area has slowed to a trickle.

I am going to have to change the way I format my chart pretty soon, because in some areas the number of purchase loans is outnumbering the amount of refinance loans being done in a given month.

The Santa Barbara, Goleta, Carpinteria, Montecito areas haven't quite seen the number drop that far yet, but it is the lowest it has been in years.

A year ago, all I kept hearing was that this year could possibly end up being one of the biggest refinance markets we would ever see. The folks predicting this were seeing the huge number of loans that were going to be adjusting and determining that they would all refinance.

Many borrowers were opting for programs like a fixed for 5 year loan and those loans are all about to adjust, if they aren't already. I guess the borrowers are just not being hit with the large adjustments up in their payments and or they are stuck with the loan they have since lending standards have tightened.

Whatever the reason, the refinance party is over. Someone turn out the lights.

Wednesday, August 20, 2008

Southern Santa Barbara Real Estate Numbers

July was a pretty lack luster month for home sales on the South Coast. The South Coast includes many incredible communities like, Santa Barbara, Carpinteria, Montecito, and Goleta. The number of sales was 118 but that doesn't tell the entire story. Real Estate is a very local commodity and is getting more local by the minute. Looking in to the specific area that is of interest to you is very important. So let's do that!

The Santa Barbara real estate market appears to me that it just hasn't really got it's legs under it yet. It's trying, but as you can see from the accompanying chart one month it's heading up the next month it is heading down, and overall it is way behind last year and the year before. March and April were showing some good signs and then we had a drop in May and a tick up June, and then July dipped again to 56 sales.

In Montecito the real estate market has had a pretty good year but is appearing to be taking the summer off. June and July's numbers were slightly below the numbers for 2007 and 2006. If you look March, April and May though you can see there were quite a few sales and the last report I saw showed median home prices up a bit. If I had to hazard a quess for this market I would think it is going to continue to average around 16 or 17 sales for the rest of the year, making this year a pretty decent year for Montecito.

Carpinteria and Summerland appear to be in the same boat as Santa Barbara. These communities are just ticking along at a pretty sleepy pace. July was the first time all year that there were more sales (10) than in one of the previous 2 years. Carpinteria has some of the more affordable neighborhoods on the south coast and so I would expect them to begin to pick up as prices have dropped pretty significantly.

Last but not least is the Goleta real estate market. As Carpinteria does Goleta has many of the more affordable housing tracts around. I believe this is why we are seeing the numbers in Goleta beating last year. If you look at the 2nd quarter as a whole this year beat last year by 1 transaction. Not only that but July of this year was ahead of July last year. I think the price point in Goleta is starting to be discovered. Buyers are beginning to pay what sellers are asking for. The sellers have come down enough to where buyers are seeing these properties as bargains. This is one of those markets to watch. It may be the first one that signals a turn around on the south coast.

Friday, August 15, 2008

Banks Just Keep On Building Their REO's Portfolio

July showed the normal number of REO's going back to their respective lenders. For the entire county there were 185. The last few months have been very similar. Where things aren't that similar is how they were distributed.

The number of properties going back to the bank in the South County was 22. That is double the number of June. What could be the cause of the increase. My thoughts are this; Nobody is immune from the economic drama we find ourselves in. It just takes longer for it to reach some areas. I have no crystal ball, but we will probably see some similar numbers in the near future. I don't expect it to last that long though. My belief is that it took longer to hit this area and it will last a much shorter time.

Here are the specific numbers; Santa Barbara 12, Goleta 7, Carpinteria and Summerland 3. I expect August to be in the same ballpark, since the number of Notice of Defaults hasn't increased significantly, but stay tuned.

Northern Santa Barbara County is still the winner though with a total of 163. The reigning champ of REO's is still Santa Maria with 117. Lompoc had 36 properties on the list. The rest were spread out over the Santa Ynez Valley and outlying areas. These numbers are up just a few from June. This could be due to the fact July had 1 more working day than June.

Thursday, August 14, 2008

What's Happening On The South Coast?

Santa Barbara's South Coast's Real Estate Market has been experiencing historically low numbers of transactions. Carpinteria, Goleta, Santa Barbara, and Montecito have all had their part in these numbers. Real Estate, even in our little part of the world has not been immune to what is happening every where.

This year the highest number of real estate transactions that have been recorded was 135 back in April. That was followed by 132 in May, 127 in June, and 118 in July.

You have to go back to August of 2007 to find a number higher than these. Guess what happened then? The credit crisis hit and we haven't been the same since.

People I speak with seem to be under the impression that getting a loan to buy a property is impossible. I'm here to tell you it isn't. We are closing escrows and most of them have loans involved. So if qualifying for a loan is what has you on the sidelines right now make sure you check in with any one of a number of terrific loan people here in town.

I am also hearing that people think the price of real estate is going to continue to drop here on the South Coast. If it is, I'm not sure it will be for much longer as I've seen the northern part of our county begin to heat up. I haven't done any extensive reasearch, but I believe the age old supply and demand theory. The prices in Santa Maria and Lompoc must be viewed as good by those buying and since the number of closed purchases is up significantly you would think the demand will keep prices from dropping any lower. I also believe the Santa Barbara and Goleta areas won't be far behind.

I also know I haven't met anyone yet who can really predict the bottom of the market. By the time all the signs of the bottom are evident it is too late. If you are considering purchasing in the near future get prepared now. The opportunity may present itself sooner than you might expect. Stay in touch with your real estate agent and keep abreast of properties in your price range and locale.

If you need a recommendation for a real estate agent or loan agent don't hesitate to get in touch with me. I have been in this community and in this business for 18 years.

See You In Escrow

Monday, August 11, 2008


I have absolutely no problem promoting Ed Heron to be on the Santa Barbara School Board. I have worked with him on many different projects and work related items over the years and he is truly one of the great community leaders in Santa Barbara. He recently sent out an email to many of his friends and colleagues letting them know about his candidacy and below is part of that email. Get out and vote, and when you do remember Ed.


H. Edward Heron, Retired Business Executive

A sixty year resident of Santa Barbara graduating from Peabody, La Cumbre and Santa Barbara High School. Bachelor’s Degree, Business Economics, Claremont McKenna College. Married 41 years to Mary, 3 children, 7 grandchildren.

42 year professional real estate career in Santa Barbara. California’s Distinguished Realtor, 1992. Director for City Commerce Bank and Mid State Bank serving on their audit committees. Founding President, Mid State Bank Foundation and Chair, Coldwell Banker Community Foundation. Immediate Past President, Partners in Education and a leader in its Computer For Families program for the past 10 years providing over 6,000 computers free to South Coast families. 2006-2008 Chair, UCSB Economic Forecast, Santa Barbara.

My focus will be fiscal responsibility, supporting talented teaching professionals, implementing the 2008-2013 technology plan, make certain by citizen oversight that parcel tax funds, if passed, are used to supplement music, art and theatre programs, foreign language, math, science and technology education. Create partnerships, never needed more than right now, between parents, educators, and businesses knowing that children do well when supported by family and the community.

I am dedicated to Santa Barbara, Goleta, and Montecito having the finest public schools possible emphasizing achievement for all students. I would be honored by your vote.

Wednesday, August 6, 2008

June Loan Activity

The loan activity in Santa Barbara County in June was less than impressive.
In the Southern part of Santa Barbara the trend for refinances and purchases is still down. Not down significantly from previous months, but down non the less. I would expect the refinancing of property to be a pretty slow grind for a while because of the tightening of credit.
In Santa Maria it is more of the same, but the purchase market seems to be more stable, but the refinance business appears even more difficult. I don't see that changing any time soon.
Lompoc is looks like a carbon copy of Santa Maria with less transactions. The purchase market appears to be stable, but the refinance market is down significantly.

Northern Santa Barbara County Homes Sales, Up?

I know that blogs don't get much attention when they publish good news, but I guess I'll see if anyone will read this.

When you look at the numbers in Santa Maria and Lompoc and the sourrounding areas the number of home sales has certainly trended up.

June was the third month in a row that Santa Maria was over 130 sales. The highest number of sales in all of 2007 was 104. In 2006 March, July, and August were all in the 130's. June of this year actually hit 141, which is the hightest number in at least three years.

Lompoc is a little different story, but since February the number of sales has been climbing. 45 in March, 42 in April, 51 in May, and 50 in June. 51 is higher than any number in 2007, but not as high as the 68 transactions in January of 2006. It certainly is a huge improvement over the end of last year where in September, October, November, and December were all in the 20's.

It would appear that if you are looking to take advantage of the lower prices in these areas that you should certainly consider making offers now. I would think the increased demand would help prices flatten or start to rise a bit.

If you would like to see the area sales you can click on the map links to the right for these areas. You can also view the charts showing the number of sales on the right.

If you would like more information on June's home sales in Southern California, you can check out Dataquick.

Friday, August 1, 2008

Down Payment Assistance!

In these troubled times when qualifying to buy a home is harder than it had been. There are ways one can get help. One of those ways is with a local organization called Cabrillo Economic Development Corporation.
In looking through their website they began a number of years ago helping migrant farm workers in the Ventura area secure housing. This next paragraph is taken straight from their website.
Since these humble beginnings, CEDC has built more than 1,000 units of affordable for-sale and multi-family rental housing, manages 440 affordable rental units, and has counseled more than 1,800 households preparing to purchase a home. In addition, CEDC has helped 275 families into home ownership through education, counseling, and lending services.

One of the big pieces of their programs is educating people on how to navigate the process of owning a home. They will be in Santa Barbara next week to educate the local real estate community on how to use their down payment assistance program for first time buyers.

The real estate downturn has not produced much in the way of good news recently, but organizations like this are getting much more attention. This attention is well deserved, since they go about showing people how to own homes the right way.
If you have specific questions for them, I would suggest to check out their website mentioned above or giving them a call at 805 659-3791.