Our sales, over the past month, are up for Santa Barbara area and our inventory is been rapidly decreasing. Year over year sales are up 26%. Over the past 5 years, we have had a 13 months supply of homes, but now we are down to only 3.8 months supply for our areas from Carpinteria to Goleta. With the supply of homes dropping, all of our listings are selling including our distressed properties.
Market values here in Santa Barbara have finally stabilized. We lost most of our equity in this cycle change during the first two years, so now real estate is now on sale at 35% off.
For many of our friends and family the mounting debt owed against their home is affecting their lifestyle. Also, the search for alternatives to foreclosure is on the rise. Alternative are: a short sale, loan modification or refinance. Each of these alternatives has less impact, over time, on ones credit.
Are you thinking you are alone in this mess? You are not. Ted, a client of mine, who opted to request a short sale 24 months ago, has returned to purchase a home. He was surprised that a lender would be able to qualify him with just 3.5% down, a FICO score of 620 or greater, documentable income, at a great rate of 4%. Ted is thrilled at the opportunity to own a home again, only two years ago after he closed a short sale. The good news for him is that the interest rate is still in his favor as well as having lower home prices.
Should Ted have chosen to do nothing and have the bank foreclose on the property he would have had his credit affected negatively for at least 5 years. With a short sale the sellers exit from the property much more gracefully than during a foreclosure because the seller knows the escrow period and can plan ahead for the move.
With a foreclosure I have heard horror stories of the police giving the seller one hour to vacate the property without any warning.
The National Association of Realtors reports that 70% of homeowners who go through foreclosure have never spoken with a real estate professional. For me this is a very sad statistic since there are so many REALTORS available to answer questions and help sellers explore all of their options. My goal is to lessen the percentage of uninformed sellers now. With better credit scores comes a better life sooner to our whole community.
Let’s talk now.
Broker for Abercrombie Fine Homes Inc.,
Past President to the Santa Barbara Association of Realtors,