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As Charles Dickens said, “It was the
best of times. It was the worst of times.” There may be
no better application of that sentiment than to the
Goleta Valley business market. High-tech is solid, and
real estate, tourism and a variety of service industries
are booming. But housing prices, limits on real estate
development (both residential and commercial) and the
cost of doing business in California are making
successful companies leave for more hospitable locale,
and dissuading companies that remain from expanding.
Historically, technology-based
businesses have blossomed in the Goleta Valley. The
University of California at Santa Barbara has been a
hotbed of scientific and technological advancements
which have resulted in numerous start-up companies and a
‘business incubator’ environment where young companies
can take advantage of the wealth of brain power and
venture capital found in the area. There has also been a
trend that once these enterprises flourish and become
successful, they are inclined to migrate to more
business-friendly locations. However, the flood of
expertise and innovation flowing from the University
means that these businesses are often quickly replaced
by new emerging companies.
While the trend is for companies to
use the area during development and then to leave, this
certainly has not been an intractable rule. Raytheon,
Inamed and other large technology companies have
maintained their presence in the Goleta Valley, though
expansions in operations are often done outside the
area.
In addition to the strength of the
technology industry, real estate has been one of the
pillars of the local economy. This has been a bit of a
‘double-edged sword,’ however, as the high (and rising)
price of real estate that keeps this sector so
profitable has also made it far more difficult for local
businesses to recruit and retain employees.
Blessed with a near-perfect
year-round climate and majestic scenery, demand for
Goleta Valley, and South Coast real estate is a global
marketplace. Modest homes become coveted gems. Although
shy of previous years, housing sales in the region
continue to do extremely well. The fourth quarter of
2004 saw fifty-two homes sold in the Valley with a
median price of $859,000. Sales were slightly off pace
at the end of 2005, with thirty-four sales closed and a
median price of $890,000. Although sales have quelled,
many argue that there will never be a lack of buyers and
sellers in the local real estate market.
The same characteristics that make this an incredible
real estate market have made Goleta and the South Coast
a haven for tourism. Our internationally-acclaimed
region, framed by mountains and the Pacific Ocean,
receives record amounts of tourists each year. Hotel and
motel revenues are outstanding in the valley, and
promise only to increase. Complimenting the leisure
tourism industry is a business and academic travel
sector fueled largely by the University of California at
Santa Barbara. Blessed by a world-renowned University as
its neighbor, Goleta sees a continual stream of new
students, their family and friends, visiting professors
and lecturers, and transient and short-term students who
all add to local numbers on tourism.
Retail stores, restaurants, and other
food services perform quite well in the region. In fact,
The Economic Forecast report for 2005 indicated that
many of the jobs created this year would be through real
estate and retail trade.
At the July 2005 presentation of the
Goleta Economic Forecast Bill Watkins of the UCSB
Economic Forecast Project told attendees that the areas
where he sees the greatest potential for growth are
services for retirees. “Just think of them as tourists
that stay longer,” he said, noting, “They are the
ultimate ‘clean industry.’ Retirees come and need
investment assistance, restaurants, doctors, and other
non-polluting services.” The growth of the retirement
population will also continue to support the real estate
market well into the next decade Watkins forecasts. |
