Despite economy, Santa Barbara agents are busier than ever
When Santa Barbara County was sent into lockdown in mid-March to combat the growing coronavirus crisis, the residential real estate industry held its breath and expected the worst. Buyers and sellers faced serious fears as jobs were in jeopardy and the prospect of opening one’s house to strangers kept homes off the market.
“Basically in both directions buyers and sellers backed off. It became a real concern,” said Village Properties owner Renee Grubb.
Now it appears those fears have been alleviated.
Over the last two months, real estate activity has remained strong in the Santa Barbara area, and agents are busier than ever despite the transition to virtual showings.
“I would have to say at least for now things are getting better. When I go on my calls for the California Association of Realtors, and they report on all of California, it’s looking better everywhere,” Ms. Grubb told the News-Press.
“I chose not to lay off any of my staff, and I feel fortunate that now the market is doing better and so my losses haven’t been as great as I thought they were going to be, which makes me happy of course.”
At the end of March and going into April, the forecast was bleak. Village Properties saw a significant dip in closings and properties fall out of escrow. Compared to 2019, they saw a 50% decline in business.
“Things started to pick up around mid-April. I think more people had gotten used to what was going on. We’ve been doing this for a month,” said Ms. Grubb.
“You never know until they close of course, but there are showings of high-end properties three, four, five times a week now. That kind of high-end activity actually started maybe two and a half to three weeks ago to where my agents who sell high end have been very busy.”
While the flurry of activity has been surprising, some agents, like Cristal Clarke, did not even see business slow.
“For me there was no lag time,” said Ms. Clarke.
“It was constant. I mean long hours working. It’s been nonstop.”
Ms. Clarke was concerned at first, but soon saw a lot of interest from buyers from Los Angeles and San Francisco, especially in the under $10 million market.
“I think people want to be here. They see the beauty that Montecito and Santa Barbara has to offer and they’re not thinking about ‘I’d love to live there in the future’. They’re really putting it into place now, be it primary homes or secondary homes,” said Ms. Clarke.
Kyle Kemp, district manager for Berkshire Hathaway HomeServices California Properties, believes the slowing of activity in the first week was in part due to the uncertainty around using virtual tools to conduct business. Fortunately, many of his agents were already well versed in digital showings, and those that weren’t quickly caught on.
Although they were down 60% in sales in the first week, Mr. Kemp said his agents have rallied and are now only 20% behind, with a 206% increase in property inquiries in California compared to 2019.
“Once that stopped everybody started to feel comfortable, started to get their feet on the ground, realized Santa Barbara wasn’t going anywhere, the sun wasn’t going away, and all of a sudden people started coming back to real estate again,” said Mr. Kemp.
Mr. Kemp said most buyers seem to be in the technology sector, interested in getting out of Los Angeles and San Francisco and into the open spaces of Santa Barbara and Montecito.
“Those buyers don’t seem to be affected. In fact, a lot of them are telling us their businesses are doing better. We’re hit by the service industry for sure, because Santa Barbara is such an escape for everybody, so we tend to have a lot of hospitality, but that hasn’t for some reason affected the real estate,” said Mr. Kemp.
While the majority of interest and sales have been from California, agents are speaking to a lot of buyers from around the country looking to purchase homes in the area as soon as it is safe to travel.
“There are a lot of clients who want to live here, but they live somewhere where they have to take a plane ride, so they’re just kind of waiting until their areas open up more and they feel comfortable coming. I have a lot of clients coming next month in June from different parts of the U.S.,” said Ms. Clarke.
“We would be selling houses all day long if people could get here physically,” said Mr. Kemp.
“They can do as much as they can do on a visual tour but if you’re going to spend $3 to $10 million on a property, you kind of want to walk around it.”
The biggest issue for agents has been a lack of inventory. Going into 2020, there was already a shortage of houses on the market, and the number of sellers has not increased to meet the demand seen in April and May.
“I am seeing every agent overloaded with a large number of buyers and not a lot of houses to sell. We haven’t seen anything happen on prices, where I thought for sure we would see some kind of trend downwards because of what was going on, and that was absolutely not happening,” said Mr. Kemp.
This is especially true with houses on the market for $1 million and under, which agents can’t keep on the shelves. If it’s a good house, priced well and in good condition, agents are fielding multiple offers.
“It’s great for sellers, a little tough for buyers. Ultimately sellers are thinking, ‘Well, should I put my house on the market?’ It’s actually a great time because there’s no competition. If you’re a buyer, buy sooner than later because when this really gets going I think there’s more buyers than sellers, so I think we’re going to have a tough market again,” said Mr. Kemp.
Despite a rocky March, real estate agents are preparing for a surge in interest as more people adjust to home buying during COVID-19 and are anticipating a good year for business.
“I think if we’re down at all it will be single digits. If we’re down by any percentage at all it will definitely be single digits, and it’s very possible that we’ll end up matching or coming very very close to what we did last year, and it was a good year last year. I think these last few months will tell, but if it continues I’m pretty optimistic that we’re going to end up in a good year,” said Ms. Grubb.