Santa Maria-Santa Barbara, CA Federal Housing Finance Agency Home Price Index (FHFA HPI)

The Santa Maria-Santa Barbara, CA, Federal Housing Finance Agency (FHFA) house price index (HPI) is a weighted, repeat-sales index that measures average price changes in repeat sales or refinancings on the same properties. The index covers single-family homes in the Santa Maria-Santa Barbara metropolitan area.

Between 2000 and 2006, home prices in the Santa Maria-Santa Barbara metro area more than doubled. The median home price rose from $267,000 in 2000 to $542,000 in 2006, an increase of 102%. However, since 2006 prices have fallen sharply. In the fourth quarter of 2011, the median home price was $372,000, a decline of 32% from the peak.

The sharp increase in home prices between 2000 and 2006 was driven by a number of factors. First, there was strong economic growth in the region during this period. Between 2000 and 2006, employment in the Santa Maria-Santa Barbara metro area increased by 18%. This led to population growth and increased demand for housing. Second, interest rates were at historic lows during this period which made it cheaper to borrow money and buy a home. Finally, there was an influx of investment capital into real estate as investors sought to cash in on the booming housing market.

The sharp decline in prices since 2006 has been caused by a combination of factors. First, the national economy entered into recession in 2007 which led to job losses and reduced population growth in the Santa Maria-Santa Barbara metro area. Second, interest rates have risen since 2006 making it more expensive to borrow money for a home purchase or refinance. Thirdly ,the bursting of the housing bubble has led to a decrease in investment capital flowing into real estate causing prices to fall further .