for SB economy
At a Santa Barbara Executive Roundtable this month the mood did not seem optimistic for the nation’s economic outlook.
“There is no soft landing in sight,” said Mark Schniepp of the California Economic Forecast in Santa Barbara. “Recession is inevitable.
He presented results from a recent Gallup poll showing public sentiment down in the face of inflation and the Fed’s rate hikes, among other things, with general morale in the realm of that during the Great Recession and the subsequent wave of foreclosures.
“A recession has come about seven out of the nine times we’ve seen similar existing patterns,” Schniepp said.
Another harbinger, he said, is that total inbound container traffic at the ports of Los Angeles, Long Beach and Oakland were the lowest this last September than they’ve been in the last ten years, with perhaps one exception in 2016.
Renee Grubb, founder and owner of Village Properties, countered that Santa Barbara is a different market than that of the nation, and even Los Angeles. “Right now, we have 1.4 months’ supply,” of homes for sale, she said, compared to typical pre-COVID levels of about 4.5 months. “Three to 6 months of supply equates to market equilibrium,” said Grubb.
But Santa Barbara’s commercial leasing vacancy rate is up to 8.8%, said Liam Murphy, a partner at Hayes Commercial Group, calling it higher than average. As an example, he said that rent for a massage center on State Street had fallen as low as $2.77 per square feet from $4.44 during the last few years.