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The news of an end to the U.S. real estate market doldrums has been hot and heavy this past week. This follows the release of a comprehensive report on the state of U.S. real estate demand by the Demand Institute. The report cautions that projected price increases can vary substantially based on state and local factors, however on average it is very encouraging. With that caveat, here are some of its key conclusions.
You can download the full report, “The Shifting Nature of the U.S. Housing Demand” at DemandInstitute.org.
This is a tough one to call, as the Santa Ynez Valley does not fit neatly into the Report’s local parameters. That being said, we have seen an enormous escalation of buying over the past month, largely centered on the affordable segment of our market. However, we are also seeing a significant increase in sales in the luxury segment as well.
I do not believe that the Santa Ynez Valley is as sensitive to employment as many other areas. A significant segment of our market’s wealth is asset based. That being said, we have seen a large number of short sales and a dwindling number of foreclosures, largely in the lowest price segment. There are local properties in the pipeline for foreclosure, but we cannot assume that many will actually come to market.
We are certainly seeing an increasing number of Buyers in the downsizing mode. This can mean a smaller home, a smaller parcel or just a lower price point. I suspect that this dynamic will continue, creating a strong local demand for mid-range and affordable properties. The demand for our mid-range and luxury properties is very much driven by the Los Angeles and Santa Barbara real estate markets and economies, as a substantial number of Buyers for these properties come from these two markets. The information coming to us from these areas is very positive, with strong demand including multiple offers and dwindling inventories. We have seen this as well, but probably not to the same extent.
I believe that the Santa Ynez Valley real estate recovery has begun and should continue in step with those of Santa Barbara and Los Angeles. Hooray!
As always, I welcome your comments and questions. You can call or text me at 805 588-3616, or email me at [email protected]