Friday, September 12, 2008

Is Santa Barbara Real Estate A Good Investment?

I have been busy with meetings and corporate projects recently and have been neglecting getting my posts up on the blog this week. I didn't hear a lot of backlash from the 4 readers I have, so I hope they are still out there. ;o)

Today I am wanting to put up some numbers about the median price of a home that I received from Mark Schniepp at the California Economic Forecast.

As you can see from the chart, the question of whether or not Santa Barbara Real Estate is a good investment or not is pretty easy to answer. If you had purchased the median priced home in 1975 for about $48,000 it would now be worth about $1,230,000. That sounds like a great place to have put your money. We all should have bought 3 or 4 for that matter.

One of the thoughts in real estate has been it is cyclical. I have heard more than one person say that the cycle runs about every 10 years. So is that what the chart says? I would say that is pretty close to the truth.

We are obviously in that area where the prices are going down. One of the reasons the median price did not go down in 2007 is that the high end of the market was very hot. If that hadn't occurred we would probably had 2 years in a row of lower numbers. As you can see from the chart the median price does not stay down very long, so if you are thinking of buying it might be the window you are looking for.

One other thing that is fun to notice is that the increases in the median price in the mid 2000's aren't unprecedented. The 30%+ increases that happened in the 70's are the biggest increases on this chart.

If you want to hear more about the forecast on real estate locally you should attend the program being put on by the Association of Realtors and The California Economic Forecast Project at the Cabrillo Arts Center Thursday morning the 18th. You can get tickets at the Association office at 1415 Chapala St. There should also be some available at the door.

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