Greg Knowles Santa Barbara Ca.

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!

My opinion on what's next seems to change by the day.

Certain people I speak with seem to think that the market that has been affected by the foreclosures is getting healthier. More of these foreclosed properties seem to be selling more quickly and buyers are thinking the prices they are paying are very good. This is evidenced by the increase in the number of sales we have seen in Santa Maria, Lompoc, & Goleta in recent months.

On the other hand some people are telling me they think that we are going to see many more homes go in to foreclosure. Reason being current loans that are adjusting are going to continue to raise a borrowers payment. These borrowers may find themselves in a situation where they don't have any way to refinance out of these loans.

I do know that getting a loan these days is much more difficult than it had been in previous years. Some lenders are still calling Santa Barbara a declining market so they will take 5% right off the top of the appraisal before determining how much they will loan a person. An 80% loan to value (that is after the 5% reduction) appears to be about as high as most lenders are willing to go.

Probably the biggest change in qualifying for a loan is how the lenders are looking at the ability to pay the loan back. A borrower must prove to a lender exactly what their income is. In the past many lenders didn't go through the process of tax returns etc... they only required you to state your income without backing it up. Enough of this education on qualifying for a loan, what about the foreclosure market?

In looking at the numbers, Santa Barbara County is seeing an increase in the number of Notice of Defaults being recorded. Maybe we have seen this peak since the April number was a little higher than the May figure.

The number of properties going to the lender or a successful bidder at a foreclosure sale has been increasing slightly. This is represented on the chart by the Notice of Trustee Sale documents that have been recorded.

As I mentioned earlier the banks have been selling more properties as well, which is displayed by the REO number in the chart.

What does it all mean? Who can really tell, but here is my superfluous analysis of the information I have. I don't believe we will see the number of foreclosures climb much higher than it is now. There will be an increase but with the number of loans that are adjusting leveling off I believe so will the foreclosures. One thing to watch are interest rates. If they go down at all then refinancing might become an option again for homeowners who are having their payments increase due to a loan adjusting. This last scenario would be the best thing for everyone.

There were 123 properties taken back by the lenders in April. Of those only 7 properties were in the Santa Barbara, Montecito, Goleta, & Carpinteria areas.

The Santa Maria, Lompoc, and Santa Ynez Valley areas took the brunt of the bank owned properties as has been a consistent trend. 116 was the total for all those areas and the hardest hit was Santa Maria.

I'm not expecting this trend to slow down, but I also don't expect it to increase much in the next few months. We have noticed that Santa Maria's property sales had a significant increase in April and I am expecting more of the same since this was a trend in many parts of Southern California as reported by Dataquick.

I do have to throw in the prerequisite disclaimer that this information is deemed reliable but not guaranteed.

1. The number of REO's could just be mirroring the number of trustees deeds recorded
2. The market is seeing these properties move more quickly.
3. Come to think of it, it could certainly be a combination of both.

Santa Maria absolutely exploded! There were 134 transactions reported by CORT. That is a 54% increase in the number of sales from March. It is almost a 60% increase from April of 2007.

I can hardly contain myself when I see that number. To see a market have this much activity when it has had such hard times for so long is very exciting. I can only hope it is a trend and not some sort of strange aberration.

The news about Lompoc isn't quite as exciting, but none the less it is hanging in there. There were 42 transactions reported compared to 45 in March. Not a big difference, but if you look at the chart Lompoc saw a nice sized increase in their transactions the month before.

The combined number of transactions was the most for an April on our chart going back four years. Pretty exciting news for the North County. I really get the feeling that the lower priced homes in our market are becoming appealing to buyers and investors. Rates are good prices are down and people who can qualify for loans should be buying if you ask me. Maybe they think so as well.

See You In Escrow!