Open Houses Cartoon

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By C.B.

 

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a-1650640544 Apr 22, 2022 08:15 AM
Open Houses Cartoon

Spot on! I went to an open house in my neighborhood a few weeks ago, just to check it out. It was all original from the 30s, 2 bedroom and 1 bath, small lot. They were asking 1.2M and there were about 40 people at the open house. It sold for 1.6M.... insane.

letmego Apr 22, 2022 11:07 AM
Open Houses Cartoon

Same, except listed at $1.8M and sold for $2.4M. Slightly bigger...but barely. A lot of little "extra" rooms.

Babycakes Apr 22, 2022 08:48 AM
Open Houses Cartoon

SIt's simply supply and demand at work. Taking a look at the inventory in the "Upper East" side(ish) portion of SB on Zillow, and there are less than 10 houses for sale. Yeah, homeowners selling right now are going to get multiple offers, and the prices will continue to go up/up/up. No one, and I mean NO ONE, wants houses to sell for less except the buyers. When I bought my first house when working in hi-tech in Silicon Valley, I paid the outrageous price of $210,000 for a 3/1....that "nothingburger" house is now estimated at $1.5. After returning to get additional education I was then able to get a better-paying job, bought the house, returned to SB where I was paid less, sold the SV house, then took more tech night classes at SBCC, got a better paying job....bought/live in a home that I would not
able to purchase today.

Supply.....Demand.

Thomas John Apr 22, 2022 09:22 AM
Open Houses Cartoon

The first one of CB's cartoons to have a person of color in it (well, there was the image of MLK in the classroom one). Interesting considering SB is about 44% Hispanic. https://datausa.io/profile/geo/santa-barbara-county-ca#demographics

LCP112233 Apr 22, 2022 02:05 PM
Open Houses Cartoon

JT. So it's the second one? Not that it matters.

jak Apr 23, 2022 05:29 AM
Open Houses Cartoon

Uh, TJ. I’m not sure how to break it to you but I think that you might have missed the point.

a-1650725212 Apr 23, 2022 07:46 AM
Open Houses Cartoon

Hispanics are not "persons of color." The term Hispanic refers to the location of origin not color of skin.

ChillinGrillin Apr 22, 2022 09:32 AM
Open Houses Cartoon

I was thinking of nailing a few pallets together, sticking it next to the train tracks, and calling it ocean-front property. Real estate is getting ridiculous and becoming an obvious bubble.

Lucky 777 Apr 22, 2022 11:42 AM
Open Houses Cartoon

The important thing to watch is the effect of Prop 13. As of 1978 California home owners are taxed on the value a property had when they bought it. If it is ever repealed that will immediately tax many people at many times their current rate, and expedite an exodus out of the state that is already in motion.

Luvaduck Apr 23, 2022 07:51 AM
Open Houses Cartoon

Especially old people, widows/widowers hanging onto to homes since they couldn't pay current prices for other lodging. Tax laws don't acknowledge years of currency inflation so a good part of the sale price they'd pay capital gains on would actually be inflation not profit.

Chip of SB Apr 22, 2022 11:48 AM
Open Houses Cartoon

I think we have just passed the peak in real estate. As mortgage rates revert to their historical norms, the same monthly payment will buy less and less house in the months ahead. Anyone who has a variable rate mortgage could be in real trouble as their monthly payments are likely to rise dramatically. This may lead to some forced sales. Those who locked in low rates will find they can’t take their cheap mortgage with them and will be stuck in their homes. The result, prices will hold steady or fall, and sales will slow to a trickle.

jak Apr 23, 2022 05:34 AM
Open Houses Cartoon

Chip, I’m gonna be an optimist here and say “you may be right” but do keep in mind that in many areas a large proportion of sales are either to cash buyers (investors mostly) or to REIT’s etc that are looking to park large stacks of investors’ dollars into investments that produce some current income (rent) and long term appreciation. Such buyers may not care so much about mortgage interest.

Transparent Apr 23, 2022 08:20 AM
Open Houses Cartoon

..."the same monthly payment will buy less and less house in the months ahead." ...

Chip, I am happy to hear someone thinking / taking in the right terms... namely, how much depends on the monthly payment and hence rates essentially set by the government. I personally don't foresee any serious decline here in Santa Barbara, though, even if the broader market were to take a serious dip. There is still a huge demand over supply imbalance (and building to replenish supply is expensive as hell these days). Folks will always want to come to beautiful Santa Barbara.

That's not to say that you're not right about people with variable rate mortgages or forced sales. Just that folks will take their place in a heartbeat. Regarding folks 'stuck' with the cheap mortgage, again I think that's right California broad, but not in SB. In the last two years, folks are up like 30-40%. Even with a downturn, those folks will have solid equity and a great locked in rate (plus the prop 13 advantage) if/when the punch bowl leaves the party.

Luvaduck Apr 23, 2022 07:53 AM
Open Houses Cartoon

Am I wrong in thinking that the price per sq ft is higher in the "lower" price ranges than in the mansions? It seems like you'd get a lot more for your money if you could afford the latter.

sbdude Apr 23, 2022 09:05 AM
Open Houses Cartoon

Because we live in such a desirable area, there is near infinite demand for housing, and seemingly no shortage of those who can afford it. The law of supply and demand doesn't work so well under these conditions. I believe we could build houses all the way to Gaviota and prices would still be super high.

Gimli Apr 23, 2022 10:40 AM
Open Houses Cartoon

My mom was about to purchase a house in 1969 on the 1000 block of E. Haley St. for about $18,000 and it was a fixer upper. But she came down with health issues and she had to stop working at that time. I was 13 that year. Also around 1979 or 1980 she could have purchased two houses (she was back at work at this time) on the same property for $40,000 with no down payment because the owner of the homes was a former landlord, and my mom rented one of the houses from him from 1962 to 1963 He came over to the house to say goodbye because he and his wife were moving back to Texas and he told my mom he sold the houses. My mom told him if she knew that she would have wanted to purchase them. He said to her, "If I knew that, I would have sold them to you with no down payment, and I would not have to use a realtor or a bank. It would have been straight across between you and I working out monthly payments straight to me." This was over around North Voluntario and East Gutierrez Streets. Well those days are certainly gone with those kind of price deals in purchasing a house.

biguglystick Apr 23, 2022 11:25 AM
Open Houses Cartoon

Real Estate here in my homeland is disgusting right now. There are predatory realtors who constantly send out flyers to homeowners trying to get them to sell. It's like ambulance chasing. Just disgusting. What has happened to our world? 4 Generations of my family here and we will now NEVER be able to afford a home unless we move out to an undesirable place in the desert. It's just SICK.

Babycakes Apr 23, 2022 04:39 PM
Open Houses Cartoon

Big Ugly Stick: With a little research, you simply need to find a realtor who will take less than the going commission rate. Also, find a homeowner who will sell for the price that you, a fourth-generation local, substantially less than market rate. You can also purchase directly from an owner if they own their home outright, and they will be your lender....they can set the terms, so you might not even need a down payment, and terms could be set for 50 years. To be smart, you'll need to retain a real0-estate attorney and a title company, which cuts out the middle persons (the realtor, banker, loan officer, etc.). So, 1, 2, 3, and you're on your way to home ownership....now you have to be able to afford the property tax, maintenance, upkeep, paint, appliances....for that, you're gonna need some dough.

dukemunson Apr 24, 2022 07:55 AM
Open Houses Cartoon

Baby - this scenario you lay out is pure fantasy. None of these things happen in a place/market/environment as this unless it’s a family member or friend. Maybe if we hit a crazy recession and interest rates go back to Carter’esque levels but your scenario is a fairy tale at this point.

biguglystick Apr 23, 2022 11:28 AM
Open Houses Cartoon

When the cost of living gets so high here that service people, artists, common middle class families are driven out, the town will CRUMBLE, and we are hovering really close to that right now. Who can afford to live in SB if you aren't rich? One must have 2 jobs or more flows of income to handle rents today, let alone a mortgage!! It's just untenable. SAD. This cartoon is right on the mark.

edney Apr 23, 2022 01:17 PM
Open Houses Cartoon

Realtors are sending out flyers.
There are people who were worried about retirement that now can sell their home here, buy one elsewhere and have plenty of investment income to pay for their retirement.
That is called making an informed decision, but I realize the world would be a much much better and more equal place if their home was confiscated and given to me.
Why stop at rent control?
Lets do sell control as well

a-1650752380 Apr 23, 2022 03:19 PM
Open Houses Cartoon

Santa Barbara has almost always been a place with relatively premium prices. The last downturn in the market, during the 2011 "Great Recession" saw substantial declines in property prices for condos and townhouses, which plunged 50% from 2006 bubble highs and average middle class homes down at least 30%.It was also harder to qualify in 2011 due to the mortgage debacle which caused the recession. Current prices do seem to reflect a bubble, with lots of out of town cash chasing the few available homes, especially for homes on the ocean side of the freeway. Rents have also gone up astronomically, small homes on the mesa renting from $7,000 to $15,000 a month!! Again, townhomes, condos and other PUD's are relative bargains right now, both for rentals and sales.

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