Any Great Deals on Homes in Foreclosure in Santa Barbara?
The common myth out there seems to universally be that homes in foreclosure must be the best opportunities to buy a cheaper home or get a "great deal". Here is the big problem with this line of thought, at least in a town such as Santa Barbara or Montecito. First, when you see statistics in the newspapers or online about foreclosures in the Santa Barbara area, it almost always refers to Santa Barbara County which includes the areas of Lompoc and Santa Maria. Both the Lompoc and Santa Maria areas are extremely different than Santa Barbara proper and really have little to do with the Real Estate market here. For almost everyone, when you talk about Santa Barbara on a Real Estate scale, you are talking about Santa Barbara, Montecito, Hope Ranch, Carpinteria, Summerland and Goleta.
All of these towns are one continuous area stretching about 24 miles from Carpinteria in the south to Goleta in the north. Santa Maria and Lompoc on the other-hand are both roughly another 55 minute drive north of Goleta and represent an entirely different Real Estate scale. So when you see statistics about this area and possibly a listing for a nicer single family 3 bedroom 2 bath home, just needing a little buyer's vision in foreclosure for $475,000, we are not talking about Santa Barbara proper.
Most of the foreclosures I have seen in Santa Barbara have arisen in the last 18 months and have been at the lower end of the price scale represented mainly by condos from about $300,000 to $600,000, as well as some single family homes from roughly $650,000 to $1.2 Million (based on the MLS listings). The problem with these foreclosures is that many of these homes were bought at the height of the market and now the previous owners have walked away from their mortgage payments as the market has dipped.
Many of these buyers also bought with very little to no money down and therefore banks now mostly have larger expenses on these properties than what the market will bare. The banks still need to sell these properties to recoup some expenses, but their "discounted" price is often just today's market price.
So are there any deals on homes in Foreclosure here in Santa Barbara?
Yes, but not that often and you have to be quick. I have personally seen about 15-20 foreclosures that I feel are "good deals" since early 2007 and these have all been in escrow within a few days. As a buyer or an investor here in the Santa Barbara and Montecito areas, the best thing to do is to work with an experienced full-time Realtor that knows the pulse of the market and knows what you are looking for. Who owns the property should be one of the least important factors of your decision process. The best is to simply look with your Realtor at what homes are available and make comparisons of the properties based on location, price and other important personal factors and then decide what is best for you, not what is in foreclosure. Any thoughts or comments on what you have seen personally?