DataQuick provides monthly data on foreclosures as well as re-sales of single family homes, condos, and new homes. This data is maintained by the UCSB Economic Forecast Project and is available for Santa Barbara since January 1989 for the median price of the resale of single family homes, as well as their number or count. A chart showing these numbers follows. The shaded areas in this plot are the recessions, with the timing determined by the National Bureau of Economic Research.

The DataQuick median price data does not address the composition problem that the Case-Shiller index does by tracking the sale price of the same home, and hence adjusting for quality. However, the Case-Shiller price indices are not available for smaller cities such as Santa Barbara. An advantage of the DataQuick median price is that it is available for single family homes and for condos and hence provides detail.

Statistical analysis of the median price data for single family homes shows that the Great Recession continues to have an impact, depressing the median price by about $148,000. Each foreclosure has an impact with a lag of about five months, depressing the median price by about $5900 per foreclosure. Each sale or count has an impact with a lag of ten months, increasing the median price by about $677 per sale. This may be revealing the supply curve and the construction cost per square foot. There is also some evidence of a two year cycle in median home prices.

The median price for single family homes was forecast for the remaining months of 2011, based on the assumptions that foreclosure continued at an average level of eleven per month and that sales continued at an average level of 67 per month. The following graph shows that there is not likely to be a dramatic change in the median price of single family homes in Santa Barbara. The DataQuick data for June just became available. The median price is $865,000 compared to the forecast for June of $904,000.

DataQuick also provides data for the median price of condo resales in Santa Barbara, as well as their number or count. This data is maintained by the UCSB Economic Forecast Project. The following graph shows these two time series, as well as foreclosures. Of course the foreclosure data is total foreclosures, not separated for single family homes or for condos.

Statistical analysis of this data shows that the Great Recession continues to have a lingering effect on the median price of condos, depressing the price by about $166,000. Foreclosures and the number of condo sales did not have a significant effect on price.

The median price for the resale of condos was forecast for the remaining months of 2011, as shown in the following chart. The forecast of the median price for condo resales was $484,000 for June 2011. DataQuick recently released data for June and their median price for condo resales was $466,000. Their price for May was $471,750. So it appears that condo prices will not change dramatically very soon.

The ratio of the median price of single family homes to the median price of condos is shown in the next graph. Before the Great Recession, this ratio of prices varied around 1.61. After the Great Recession, this ratio increased significantly to 1.84. A topic for further investigation is whether this phenomenon is observed for other cities besides Santa Barbara, and what may be the cause of this increase in the relative price of single family homes.

Author – Llad Philips

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