The State of California Real Estate

Southern California has had its great share of real estate struggles since 2007, and the economic recession of 2008 only made it worse. However, over the past few months, a stabilizing real estate market has offered optimistic views of the future of the Southern California real estate market. Home sales are beginning to rise and the drop in median prices have slowed, giving real estate experts the impression that the real estate market has hit bottom and is poised for a rebound. However, many still feel that the economic stability of the state of California and the concern for job security still pose as major obstacles to the successful recovery of the Southern California real estate market.

According to DQNews.com, many cities, including Santa Barbara, are beginning to post increases in home sales and slower declines in the median price of home sales. In fact, October experienced the smallest decline in median home prices since 2007, primarily due to a smaller inventory of foreclosed and distressed properties on the market. The median price for a home in Southern California was $280,000, up 1.8 percent from the previous month but down 6.7 percent from the previous year. Some regions near Santa Barbara are even beginning to experience year over year gains in the overall median home price. In October of 2009, about 22,000 new and resale houses and condos were sold in Southern California, which was a 2.8 percent increase from the previous month and also a 2.8 percent increase form the previous year. October also marked the 16th consecutive month ending in a year over year gain in home sales. Experts also believe that the federal tax credit for first time home buyers has also been a major factor in the increase in home sales, as well as affordable mortgage rates and home prices.

The Pacific Coast Business Times also reports that real estate experts forecast that the Santa Barbara real estate market will rebound in the coming months as signs show that the market has already hit bottom. Declining foreclosure rates will play a major role in the improvement of median home prices. However, experts still believe that the commercial real estate market has a longer way to come, given that the market is still struggling with a 13.3 percent vacancy rate and virtually nonexistent construction activity.