Local Realtors Provide Economic Outlook

Hundreds of local business people attended UCSB Economic Forecast Project’s 2022 South County Economic Summit on Wednesday, May 4, at the Granada Theater. The annual event, held in person for the first time since 2019, featured five speakers providing context to current real estate, labor, and financial markets. The Department of Economics at UCSB established the project in 1981 to provide the community with information on economic, demographic, and regional business trends in the tri-county areas.

Local realtor and former Santa Barbara Association of Realtors president David Kim offered his assessment of the region’s residential real estate market, including the pandemic’s impact on Santa Barbara housing.

A 2003 UCSB graduate with degrees in both Business Economics and Law and Society, Kim described a true seller’s market. Out-of-town buyers coupled with historically low levels of inventory have led to dramatic spikes in local home prices and fierce bidding wars.

“Out-of-town buyers were accustomed to making very aggressive offers in the areas where they lived, so they started employing those strategies here in our market,” Kim said. “There are people who’ve been doing real estate here for 40 plus years who say they’ve never seen a market like this.”

Nevertheless, Kim offered encouragement to buyers, noting that he’s seen those who persevere ultimately succeed in purchasing a home.

Gene Deering of Radius Commercial Real Estate offered insight on the South Coast’s commercial and real estate industry and hospitality sector. His presentation included drone video of the downtown corridor, with accompanying commentary.

“Right now, the City of Santa Barbara has an incredible opportunity to rethink the design of State Street, De La Guerra Plaza and the State Street underpass”, Deering commented. “We have a window of time to make the change and use some positive momentum to help State Street.”

As an example, Deering pointed to the second and third floors of the former Macy’s and Nordstrom buildings. “They total 180,000 square feet of retail space that is being converted to tech office space”, Deering explained. “If our community can attract some larger tenants to activate these spaces, that could bring a thousand workers to downtown on a daily basis.”

Deering described the local hospitality market as red hot. “In previous years we might see one hotel trade every few years. We are currently seeing more activity in the hospitality sector than anyone can remember. The demand continues to grow for hospitality development.”

Other speakers at the event were UCSB Professor of Economics Peter Rupert, who provided an update on the region’s economy and the topic of rent control; Jagdeep Singh Bachher, chief investment officer with the University of California Office of the President, who spoke about investing in turbulent times; and Josh Williams, head of BW Research, who spoke on Santa Barbara County’s employment and labor force trends.

For more information about the UCSB Economic Forecast Project visit efp.ucsb.edu.

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