With Santa Maria finally digging out from a deep housing slump, UC Santa Barbara economists think the area is poised for a bit of a rebound, with at least one exciting new industry on tap.
The UCSB Economic Forecast Project will focus on housing and residential construction when it holds its annual forecast summit on May 8 at the Radisson Santa Maria on Skyway Drive.
“Home values continue to increase, with Guadalupe leading all cities in the county at about 30 percent price gains over the year,” said UCSB Economics Department Chair Peter Ruppert, who directs the forecast project. “Residential permits are at their highest level since 2009,” he told the Business Times via email.
The program will include a panel of experts including PB Companies principal Ryan Petetit, Carl Steinberg of Williams Homes John Schuldt of Heritage Oaks Bank. The Business Times caught up with a fourth panelist, Towbes Group President Craig Zimmerman via email.
“We have not built enough new, diverse housing to provide our workforce with housing that they can afford and with an array of housing choices,” Zimmerman wrote.
With a population of 102,000 that’s now nearly 15 larger than Santa Barbara’s 90,400, Santa Maria is the 5th largest city in the Tri-Counties. Its median home price of $304,000 in 2014 is one third of Santa Barbara’s $981,300 median home price, making it attractive as a commuter location, especially for workers from Goleta, where drive time is slightly more than an hour.
A surge in home and apartment building could eventually push Santa Maria’s population past Ventura, with 108,800 people, into the No. 4 spot. Santa Maria’s median home price is about 40 percent below the median home price of Ventura at $493,000 last year. Ventura and Oxnard are two alternatives for Santa Barbara workers; thousands of them commute to the South Coast daily.
“Our strategy in Santa Maria specifically is to fill the demand for new rental housing that has all of the amenities and community aspects but is also attainable by the local workforce, whether that workforce is in Santa Maria or commuting north or south,” Zimmerman said. Significantly, Santa Maria’s median home price is far below that of San Luis Obispo, at around $616,000 last year.
Towbes’s two rental projects in Santa Maria include the 268-unit Hancock Terrace apartments, which consists of four buildings. A second project, the 211-unit Siena Apartments is about half-completed. “Leasing is terrific as we are renting 6-7 units per week at Siena since we opened,” Zimmerman wrote.
“Since no new rental housing has been built in the Santa Maria area in decades, the housing stock has aged and the requirements of today’s renter have changed as well,” he said.
To go along with increased demand for rental housing, the number of people who now have positive equity in their homes also has turned upward. “Foreclosure rates have also come down precipitously and are now close to their pre-recession levels,” Ruppert said.
Ruppert said he’s been watching the emergence of a new workforce and new industries, including craft brewing, that are adding an extra dimension to lifestyle and entertainment choices on the Central Coast. Depending on the community, craft brewing is adding jobs at a 20 percent to 50 percent clip across the tri-county region, he said.
Santa Maria long has been the industrial heart of Santa Barbara County and the center for provisioning agribusinesses, including the wine industry.
But craft brewing promises to open up new enterprises and new opportunities, Ruppert suggested. “The employment in craft brew is small for sure, there are many small shops that have opened up,” he said, “But it seems like this is an industry that is and will be expanding.”
Regulations that allow craft brewers to self-distribute are helping California’s independent brewers to thrive, a rare situation where the Golden State’s rules are less burdensome than those in other states.
Ruppert isn’t terribly worried about the future interest rate environment and its impact on mortgage rates—at least in the short term. “I do think that when the Fed begins to raise rates, probably in the fall, that it will have an impact, though probably small at first,” he wrote.
• For information about the North County Economic Forecast Summit or the housing panel moderated by Steve McCarty of Stafford-McCarty, contact [email protected]