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The following article Annual Economic Forecast For Santa Barbara County was authored by Scott Williams and is republished in this directory with the author's permission. These articles are published as an information source for real property owners, buyers, sellers, investors, realtors, brokers and contractors. We do not claim, assume, or accept any responsibility or liability for the information provided in these articles or for the services or products provided by the people or companies linked to in these articles.
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Annual Economic Forecast For Santa Barbara County
by: Scott Williams
The recently presented Real Estate and Economic Forecast for Santa Barbara County had lots to say about the recent past and the next few years. While the county as a whole appears very stable economically, the momentum is more apparent in the north. In job creation, consumer spending, house building and population growth the north has a clear advantage. There is a shift of power underway from south to north. Population growth suggests that the population of the north will exceed the south in less than two years.
About 450 jobs were lost county wide last year, mostly in manufacturing, but there has been an influx of self-employed, many who work outside of the area, but reside here. We have virtually full employment with 4.3% unemployed in our county. Steady employment with economic recovery state and country wide bode well for continuing prosperity.
Permitted new homes go 62% to the Santa Maria Valley and only 14% to the entire South Coast - Goleta to Carpinteria. Goleta industrial space vacancies have risen due to downsizing and relocation of large users. Softness in this market will continue in 2004. Santa Maria industrial vacancies are falling and its labor market is the only one in the county to show higher levels with 230 new jobs created.
Here are many of the important highlights of the forecast:
Expect stable employment, with education and healthcare as growth areas, and increasing wages due to shortages of skilled workers for 2004 and 2005. Consumer spending will increase, and more multi-family homes will be built to accommodate the increasing renter population. About 1,800 homes will be built in the next year with nearly all in the north. No bubble exists in real estate values, with appreciation expected to be in the neighborhood of 10% this year, in both the north and south, falling in 2005 to 8.3% and 6.2% respectively in the South County and Santa Maria Valley. Investment in residential structures will remain high for the foreseeable future. Investment in non-residential buildings will diminish over the next three years.
Interest rates will rise from 5.7% today to 6.5% by year's end. Inflation of the consumer price index for Southern California rose a scant 2.6% in 2003 and only 1.8% in Northern California, giving way to a 2.3% average for the state. The respected Anderson Forecast from December 2003 predicts a 2.0% rate in 2004 and 2.2% in 2005.
So What Decisions Flow?
The interest rates are as low as they are going to go. The market has at least several more years of appreciation and probably longer than that, even as it slows below 10%. The most important advice I can give is to be confident that the real estate market is not a bubble that is going to burst. This is particularly important for anyone who is in the wrong home, the wrong location, owns a white elephant, an obsolete home or one without good flow, i.e. a choppy home, or wants to move away from a busy location. Be brave, see yourself through to a better living situation for yourself and your family, and wish someone else well with your old home...it just may be the home of their dreams, if not yours.
With low interest rates and steady appreciation, there will Never be a better time to purchase a new home!
Know The Value of Your Home
It is important for you to have a current, accurate value of your home for many reasons, including your homeowner's insurance, tax and accounting purposes, and trust and estate planning. With over 26 years of experience assessing home values in Santa Barbara, I can provide you with an accurate value of your home.
When you need to know what your home is worth, just give me a call at 563-4031. I look forward to speaking with you.
Scott Williams has been involved in the real estate industry since 1977. By 1981 he rocketed to become the number one Santa Barbara agent in an organization with more than 200 agents. He has achieved the annual number one status in his office 14 times. Prior to entering real estate Scott graduated from UCSB. He has two children and mentors in the “Fighting Back” program.
He is a Certified Residential Specialist (CRS), a Graduate of the Realtor’s Institute (GRI), and teaches real estate courses for Santa Barbara Community College. Mr. Williams can be contacted at http://www.scottwilliams.com
This article was posted on May 26, 2004
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