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Santa Maria Sun / News

The following article was posted on April 3rd, 2013, in the Santa Maria Sun - Volume 14, Issue 4 [ Submit a Story ]
The following articles were printed from Santa Maria Sun [santamariasun.com] - Volume 14, Issue 4

Seller's market

A shortage of inventory in the Central Coast housing market is causing prices to creep up

BY CAMILLIA LANHAM

You might sell your house almost as soon as you list it. Or you might not get the house you made an offer on. Regardless of which side of the buyer/seller line you stand on, one thing is certain: People are in the buying mood.

As long as a seller’s price-point is reasonable, he or she will find a purchaser willing to pay the asking price—or more, said Shea Hutchinson, a Realtor with Century 21 Hometown in Santa Maria and board president for the Santa Maria Realtors Association.

“Most properties are getting multiple offers in the first week,” Hutchinson said. “Sellers are at the advantage.”

Since the beginning of the year, there’ve been 230 sales in the Santa Maria and Orcutt areas. Hutchinson said those numbers are low compared to what they used to be, which was 100 to 120 sales per month. He attributes the low number of homes on the market to banks holding onto foreclosed homes and sellers not wanting to enter the market until housing prices rise to a certain height.

Hutchinson said the pre-economic-bust Santa Maria housing market saw an average monthly inventory between 250 to 300 homes, whereas now, it’s more like only 50 to 90 homes available

“Choices are minimal,” Hutchinson said. “As long as we have limited inventory, prices will continue to move up.”

Housing prices aren’t skyrocketing by any stretch of the economic imagination, it’s just that there’s a large pool of people ready to purchase because of low interest rates, banks willing to make housing loans, and few homes on the market.

Most of the $100,000 to $200,000 homes on the Central Coast are either gone or disappearing fast, said Gary Grossman, chief executive officer of Inland Pacific Builders. And he predicts the remaining properties on the market will play out as follows: $200,000 to $300,000 homes are next in line, and then those priced at more than $300,000 will start disappearing.

He said the lack of inventory on the market means good things for the Central Coast’s economic outlook, and Inland Pacific is ready for it. The developer put residential development on hold for the last five years, focusing instead on commercial properties, but as the tide in the housing market has changed, so have Inland Pacific’s priorities.

The developer currently has 12 projects underway between Paso Robles and Solvang, with more than 1,000 housing units slated for construction.

 “Fairly shortly I believe we’re going to have a strong housing market,” Grossman said. “There’s low supply and high demand.”

Before Christmas 2012, Grossman said, they opened up the sale for 10 upscale “view” homes in San Luis Obispo and sold out within the week for higher prices than they anticipated. Skytt Mesa in Solvang is a development slated for 150 houses; 35 of those were pre-sold in the month of February and 87 customers are on the waiting list.

“The sticks are just going up in the air right now,” Grossman said. “I can’t build them fast enough.”

All the projects Inland Pacific is working on were mapped, permitted, zoned, and slated for development before 2007. Once the bubble burst, they were shelved. Grossman said his company started buying those shelved projects from other developers in 2012 because he saw a change coming, and the low inventory of available properties made it a gamble worth taking.

“Prices are going to go up,” Grossman said. “[We’re] going to have a five-year period where what’s built now is going to be all there is.”

Well—what’s already built and all the housing developments being taken off the dusty project shelf will be all there is for at least three to four years. He said it takes a while to get a new project through the approval process.

And many of those dusty projects are going to be changed before they’re construction-ready, said Bill Shipsey, a planner with the Santa Maria Community Development office.

“We’re seeing a lot of projects that are coming back to us that want to be tweaked,” Shipsey said. “Now they’re building projects with a little more skeptical eye.”

He said developers want to downgrade both the size of their housing units and the amount of “extras”—such as marble or granite countertops—that come with the house, so they can hit a certain price point for first-time home buyers.

But the city’s planning department isn’t seeing a lot of new project applications; most of what they’re seeing is what can be built the fastest, projects that already have approval.

“People are in a big hurry,” Shipsey said. “They’re chomping at the bit.”

Contact Staff Writer Camillia Lanham at clanham@santamariasun.com.