The Good, The Bad and The Ugly – An Update on the Housing Market and the Timing of Recovery

By Kelly Knight, Attorney/Broker

“We are in the top of the 8th inning . . . . . ”  So began the 2008 Santa Barbara County Real Estate and Economic Update presented by Dr. Mark Schniepp, Director of the California Economic Forecast, on September 18th.  Speaking before a crowd of mostly real estate advisors, Dr. Schniepp told the group that “it’s going to be a difficult rest of the year.”  Below are some of the highlights from his very informative presentation.

Is the Nation in a recession?  Despite all the negative media, Dr. Schniepp explained that the United States is not in a recession, yet.  In fact, the national economy grew by 3.3% in the 2nd quarter of 2008 despite the drag of the housing and financial sectors.  Dr. Schniepp observed that there has not been a broad-based decline in the economy; instead, there has been a focused decline in the housing and financial sectors.

Locally our economy has grown at a positive, albeit modest, rate.  While jobs have been lost in industries related to real estate, those declines have been offset by gains in professional, scientific and technical services industries in both the south and north counties.  In addition, the commercial real estate market is generally healthy with very low vacancy rates compared to the rest of the nation.
[Read more]

Is Your Property Tax Bill Too High? You May be Eligible for an Assessment Review

Joseph Holland, Clerk, Recorder and Assessor of Santa Barbara County, addressed a group of real estate professionals last week to discuss the operation and affect that Proposition 8 is having on the property tax bills of some homeowners in our County.

The California Revenue and Taxation Code provides that the assessed value of any property cannot exceed its fair market value on January 1st of each year.  Proposition 8 allows the Assessor to review current market values, compare them against the Proposition 13 value that was assessed at the time of purchase, and “enroll” the lesser value.  If the current market value is lower than the Proposition 13 value, that lower value is used to calculate the upcoming property tax bill.
[Read more]

“Fact, Fiction and Reality” – An Evening with Dr. Bill Watkins

Wednesday night Dr. Bill Watkins, Executive Director of the UCSB Economic Forecast Project and former research economist at the Federal Reserve in Washington, D.C., presented an overview of current economic conditions to an “invitation only” audience at the Lobero Theatre.

To the relief of many, Dr. Watkins observed that the US economy is very resilient.  Despite the number of failures in the financial sector this year, the national economy actually grew in the second quarter of ’08 at the rate of 3.3 percent.  He expects the national economy to continue to grow and avoid falling into a recession so long as credit and liquidity isn’t constricted more than it has been.  He cautioned that the economy will not grow if loans are not being made.

Locally the South Coast economy also showed positive growth of 1 percent.  Dr. Watkins joked that the South Coast is the envy of the rest of the State since our economy is very stable.  In fact, the only segment of the local economy that isn’t showing positive growth is housing related.

Dr. Watkins ended his presentation by telling the audience that he is personally looking at bank-owned properties right now to acquire as long-term investments.  He said that he planned to buy a place, rent it out long term, and “make lots of money” down the road.

Dr. Watkins’ entire presentation, sponsored by Montecito Bank & Trust, will be broadcast by Cox this Sunday, Monday and Wednesday.

Looking for a worthy cause?

Yesterday afternoon I had the pleasure of attending an educational briefing for legal, financial and real property advisors on the new Santa Barbara Cottage Hospital and The Campaign for Cottage Health System.  Lady Leslie Ridley-Tree shared an inspiring story about how she and her late husband became involved in the project to rebuild Cottage Hospital.  Her call to action was grounded in the message that the hospital will serve everyone in the community and therefore presents a unique opportunity for everyone to get involved in helping The Campaign reach its financial goals.

Later that evening I was invited to attend the Annual Reception for the Scholarship Foundation of Santa Barbara.  In May, the Scholarship Foundation of Santa Barbara awarded 2,000 scholarships totaling $6.4 million to help Santa Barbara County students with their college costs.  A recent scholarship recipient, Julio, shared a moving story about his dream of attending college despite the struggles he faced as an immigrant from Mexico.  Julio is now an American citizen and is attending UCSB (double major) thanks, in part, to assistance from the Scholarship Foundation of Santa Barbara.

We are blessed to live in such a forward-thinking community that takes pride in helping others live a better life, whether it’s through the attainment of a college education or access to state-of-the-art health care.   Please consider these worthy organizations if you are in a position to give of your time or financial resources.

Charming Westside Tudor – SOLD in 8 days.

This westside tudor style cottage sold quickly at near asking price.  This property had all the beautiful architectural detail one would expect from a 1920’s Tudor and had been well loved and maintained, which contributed greatly to it’s desirability.

www.827sola.com

Ocean view horse property – Sold in 3 days.

This is another example of the right property at the right price selling quickly with multiple offers.  4444 Meadowlark Lane sold in just 3 days with 4 offers.

So what do you get these days for $1,650,000?  You get a large, newer (1992) home on over an acre with horse stables and 1 bedroom guest house in Mountain View school district.  And in this case you also get beautiful ocean and mountain views.

www.4444meadowlark.com

The Fannie and Freddie takeover: What are we seeing so far?

Rates have fallen half a point!  Read on for a more in depth run down:

Major Points

• Fannie and Freddie have been placed in conservatorship. (Federal government has taken 79.9 percent of common stock and all dividends in return for buying $1 billion of preferred shares.)
• Treasury Department says both are open for business with no major changes in operations.
• Top Fannie/Freddie executives have been replaced.
• Fannie/Freddie can grow their guaranteed mortgage book with no limits and grow their retained portfolios with limits. Ultimately, the government plans to shrink their portfolios (10% per year starting in 2010). [Read more]

The Feds Take Over Fannie and Freddie – What Does This Mean for the Santa Barbara Market?

This weekend the federal government took over mortgage giants Fannie Mae and Freddie Mac. Fannie and Freddie play an essential role in the mortgage industry and the economy in general, even though most borrowers never come in contact with them. This is because they work with mortgage lenders rather than consumers. According to most industry experts, the move should help bring interest rates down and settle the markets.

Fannie Mae was formed by the federal government in 1938, following the Great Depression. Fannie Mae is the common name for Federal National Mortgage Association. Freddie Mac was created in 1970 and is the common name for Federal Home Loan Mortgage Corporation. While these organizations were originally government sponsored, they are now publicly traded companies. [Read more]

San Roque Cottage – Sold in 14 days.

Our wonderful 3 bedroom 2 bath San Roque listing sold in 14 days with an all cash offer!  This picture perfect 1940’s charmer is on one of the best streets in Santa Barbara and offered beautiful mountain views and privacy.  To see additional photos and get more info, go to the dedicated property site at:  www.3531lospinos.com.

More on Foreclosures and Short Sales in Santa Barbara

I thought it would be interesting to show visually where the foreclosures and short sales are occuring in Goleta-Montecito.  As you can see from the included image,  there are definately clustering in certain areas.  I have circled from left to right:  the El Encanto Heights area of Goleta,  the Westside, as well as the Lower Eastside.  That these are the areas that are feeling the most pain makes sense as they also contain a lot of what passes for entry level properties.  Also of note:  there are only 2 distressed properties above Foothill/Catherdral Oaks.  If you would like to be added to my foreclosure/short- sale mailing list,  please email me at: mjdaysb@mac.com

Next Page »