There is a lot of talk these days about the “rebounding” real estate market and the lack of inventory in our area. At the same time, the conflicting chatter is that the coming elections coupled with coming changes in government regulation have frozen sales on bank-owned properties, thereby generating a misleadingly low inventory. Frankly, I believe both opinions are accurate, but one must consider them locally rather than on a national level.
The basic concept of supply and demand is the key factor driving any real estate market in the U.S. In the recent past, we have seen a shortage of inventory and a growing demand for single-family residences. Predictably, in certain price ranges there are multiple offers on well-priced properties, with some selling above the listing price. So, where are the bankowned properties? Well it seems that the banks are holding off on releasing them. Why? Most sources say that due to regulation changes by the government, banks are being forced to hold properties and restructure their procedures before releasing more properties. Others believe this is a political move to artificially control the “supply and demand” equation in order to boost the economy via the real-estate market… and it seems to be working.
So what happens when the banks start releasing properties for sale? Here is where you have to consider your local market. With interest rates at all-time lows and demand high for Santa Barbara property, I don’t think we will see much change at all, except for more buyers. Interest rates are at such low levels that buying makes sense again whether you’re an investor or not.