One of the biggest hitches we’ve faced in the Santa Barbara real estate world recently is our lack of inventory. I know, I know… you’re pulling your hair out and screaming into the void, “What is this guy talking about? There are tons of houses for sale! Has Mike lost it?”
To be fair, your perception is in fact what most people believe. Unless they have been actively looking for property to purchase, that is. Unfortunately, my experience is that active buyers recognize and freely acknowledge that we have experienced a slowdown in inventory over the past six months.
Adding to that, most skeptics now think some looming, foreboding “Shadow Inventory” will sink our market again. But I tend to think that this inventory is exactly what the Santa Barbara housing market needs. (And I’m not just being contrarian, I swear.)
So, what, precisely, is this dreaded Shadow Inventory? It’s the number of homes that are either seriously delinquent with loan payments, bogged down in foreclosure or owned by lenders and servicers but not currently listed on the market (or some combination thereof). Interestingly enough, while demand is high and inventory is low, prices are actually holding steady rather than jumping up. And adding a Shadow Inventory to the equation shouldn’t harm pricing, assuming demand remains strong.
So I say, bring on the Shadow Inventory and let some of that pent up demand be quenched. We have the fundamentals and economics in place at this point to weather any related storm.
Below is this week’s breakdown of four properties worth taking a look at.