A Good Buying Opportunity Exists Now & Here Is Why.

There is currently a desirable amount of supply from which to select from right now, and as we move into the holiday season, where traditionally we see less buying activity, it makes for a good selection, and perhaps greater negotiating power for buyers. The local economy is strong, the stock market is doing well at the moment, and interest rates are at historical lows.

The Santa Barbara Real Estate & Economic Outlook was held in Santa Barbara on September 21, 2006 . The Outlook and foregoing quotes are by Economist, Mark Schniepp of the California Economic Forecast.

The Santa Barbara Real Estate Forecast

• "We do not foresee material price declines in nominal real estate prices"

• "As we continue to monitor the fundamentals that move the market, a bursting bubble is unlikely because the general economy is still growing, labor markets are currently at full employment, incomes are growing, and a recession is not on the horizon."

• "As buyers delay purchasing, some pent-up demand will be pushed into 2007."

• "Today, in the year 2006, most sellers are able but not yet willing to sell for less than their perceived home's worth. Until they are distressed, housing values will not adjust to what buyers are willing to pay.its not likely sellers are going to be distressed anytime soon. As we see it, there is no major slowdown in the economy coming.Consequently, unless sellers must sell their house, they wont"

• "Until distress becomes a more pervasive among home sellers - both new and existing - it is unlikely that asset values (selling prices of homes) will significantly decline. Historically, even with distress, the decline in nominal selling values was not devastating, in California or Santa Barbara County.

• "There is a long legacy in California that shows that nominal housing values don't fall much, even during weak economic periods. In view of that history and the fact that the economy today is still expanding, creating jobs, and is at full employment, it is less likely that material price declines will occur."

• "The lack of distress in the general economy is not motivating sellers to reduce listed home prices to accommodate the expectations of would-be buyers. A stalemate between buyers and sellers therefore exists."

• "Values in many markets will remain resilient, especially coastal markets of California where housing is scarce and speculative buying was not excessive."

Supply & Demand: Limited Amount of Homes and We're Not Building More

• "New residential development is down sharply.

• The production of new housing is on pace to record a 4 th straight year of decline and the lowest level since 1996"

Two Different Real Estate Markets in Santa Barbara

• For the first eight months of 2006, the median sales price in Montecito is up +9.2%. Hope Ranch is up +5.7% in median sales price. The South Coast condominium market, at the other end of the Santa Barbara real estate spectrum is up a scant +0.7%. With Montecito and Hope Ranch representing the "high end" of the Santa Barbara real estate market, and the condominium market generally representing the "entry level" of the Santa Barbara real estate market.

• "Last February, we reported on the widening margin in the median selling price of homes in the South Coast both with and without the inclusion of Hope Ranch and Montecito into the mix. Over time, especially in 2004, the more expensive areas of the South Coast were indicative of higher rates of appreciation. A price index, with and without Hope Ranch and Montecito, shows that the price margin is persisting into 2006."

Strong Economy in Santa Barbara

• "Consumers are still spending in all retail markets of Santa Barbara county. The growth of retail sales is healthy and retail vacancy rates are extremely tight."

• "The unemployment rate continues to fall, to near record lows"

• "Incomes are growing.non farm salaries jumped 4.6% from 2004 to 2005."

I might add some commentary that while this information speaks to a good buying opportunity, it missed some critical demographic analysis. Santa Barbara 's housing is priced similar to other upscale real estate markets throughout the US , but these other markets don't compare on quality of life issues like weather, lifestyle, lack of congestion & little traffic. With this quality of life component in mind, consider the number of baby boomers beginning to retire. What is the future of our supply & demand knowing that we are not developing new housing?

For more detailed statistical analysis, or for information on our current inventory, please contact me at anytime. Wendy Elizabeth Gragg, Distinctive Real Estate, 805.565.0246 WGragg@DistinctiveRealEstateOnline.com or log onto www.DistinctiveRealEstateOnline to view up to the minute inventory currently for sale.