Team Sweasey's Real Estate Blog

Oct. 8, 2019

How Is A Property’s Value Established?

Before I begin today’s market report, be sure to save the date and join us on December 7 at 9 a.m. for our 19th Annual Movie Event, where we’ll be watching "Frozen 2". Bring your kids!

Now for the market stats:

We had a few more sales and pendings this past September than we did a year before. That means we still see some homes with good value and amenities getting multiple offers – it’s clear that there’s still demand for those homes.

And yet, there are homes that would have sold six months ago but, for whatever reason, won’t now. We’re now having to make price adjustments because of some feature or other, or because the demand has simply dropped off.

Overall, we’re in pretty much a normal market. Instead of a home selling in six days, it might take two or three months for the average home to sell.

Moving on: How do we determine the market value of a home?

This is a big topic on peoples’ minds when it comes to buying or selling houses. There are four ways that we can determine a home’s value:

1. Appraised value. An appraiser is a professional whose job it is to study the market and determine a home’s value by estimating how much they think a buyer would pay for it in a normal market.

2. Assessed value. The assessed value is what the county assessor puts on your home, and is usually not related to market value.

3. The seller’s estimation. Often, homeowners think that their home is worth more than it might actually be.

4. The buyer’s estimation. To come up with an estimation of a home’s value, they look at the features and benefits of your property and compare them to the features of other, similar homes in the area that are for sale or have recently sold. What features buyers look at specifically can change by the day.

In the end, home values are what buyers are willing to pay for a home, and if the seller accepts that offer, that will set the home’s value. Since there are so many factors at play, we have to monitor the market to stay on top of what home values are doing.

If you have questions about your specific market area or you’d like to discuss your home’s value, please reach out to me. We’d love to help you.

Sept. 10, 2019

A Few Key Messages About Our Market

Before I get into today’s regular content, I wanted to say thank you—we received a lot of great responses about our little walk down memory lane last time where I talked about how I got into the business and how things have changed over the last eight or nine years. Your feedback is much appreciated.

Now, back to today’s message, which is actually threefold: First, I’ll brief you on what’s happening in our market; next, I’ll discuss our upcoming “September to Remember” event; and third, I’ll talk a little about how we get our clients to the finish line of the escrow process.

Real Estate Market Update: September 2019

In our market, the number of homes available are down by 10%, and the number of actual sales dropped by 8%. The year-over-year drop in new listings was even more significant—there was a decrease of about 40%.

We have been noticing more price reductions, which shows us that even in this market, overpricing your home means you’ll end up making an adjustment. We’re still getting multiple offers in certain price ranges for well-priced homes.

Ours is a fairly normal market, so we’re used to trends like these. The only unknown is all the new homes that have been planned; a few of them have just come on the market, so that could affect what happens going forward.

A September to Remember

Our clients who are just now going into escrow are getting amazing interest rates—around 3.375% for a 30-year loan. Some FHA and shorter-term loans are even lower! Buyers who can take advantage of that will benefit from many years to come.

This month, we’re committed to helping over 30 families take advantage of these conditions, and we’re calling this initiative our “September to Remember” event. It’s so nice to call a client after a few years and learn that they’re so grateful to have been able to get a great property at an amazing rate. They’re saving hundreds, if not thousands, of dollars.

Navigating the Escrow Process

There are many external changes going on that affect the real estate industry, particularly our clients’ abilities to navigate the escrow process. The following are a few examples of things that can complicate the process:

- Fire insurance
- Solar panels
- Sewer lines/septic systems
- Requirements for new homes to be all-electric (no natural gas)

Our team collectively has over 180 years of experience, so we can help you spot the pitfalls we’ve encountered before to get you to the finish line of closing on your home. If you’re going to anticipate going through a home purchase yourself, we would love to apply for the job of helping you from beginning to end.

Aug. 9, 2019

Talking a Walk Down Our Market Memory Lane

In today’s market report, I’d like to address three topics: 1) I’d like to take a quick walk down memory lane; 2) how all the new construction has affected the market; and 3) a general update on the market.

First, we’ve learned a lot in just the past eight years here on the team. We’ve gathered an amazing team together, and we take time every week to work on and improve our quality of service. Since 2011, we’ve sold over 1,200 houses!

Let’s go back to 2011 for a moment. If you owned a house in Morro Bay at that time, there would have been 122 other homes for sale on the market. This year in 2019, there were 33. In the 2011 Morro Bay market, the average sales price was $323,000; in 2019, the average price has soared to $800,000!

Now let’s look at a less extreme example: San Luis Obispo. This month, we had 118 homes on the market; in 2011, we had 212 homes. The average price this month was $861,000, which is still quite a jump from 2011’s $480,000. In Paso Robles, the average price went up from $269,000 to $474,000. As I said before, our team has grown a lot since then, and the market has changed as well.

Secondly, we have a lot of new homes coming on the market, which usually affects the market, but it hasn’t impacted us just yet. There have been a number of sales in the San Luis Obispo area, but not many were the new homes in the area. It could be that they’re not quite ready to sell yet; at any rate, our market hasn’t been affected yet. However, if you factor in the 1,700 to 1,900 homes that are planned to be listed on the market, that’ll take a big bite out of our inventory, meaning there’ll be a lot more for sale.

And that brings us around to our general market report. This month, virtually 20% more homes sold than this same time last year—a big increase in closings. There was also a 32% reduction in new listings, and inventory is down by about 3%. Some people are holding onto a specific price, but if you’re realistically priced, then you’ll be in good shape in this market.

So what does this all mean for you?

If you own property, it means you’ll have virtually no competition. Combine that with our interest rates (which are at four- to five-year lows), and our market is a perfect storm. If you’re in the market to buy, you can act now to lock in our low rates for the life of your mortgage.

Again, thank you all for your support and your referrals. If you have any questions about the market or about buying or selling real estate, don’t hesitate to reach out to us. We’d be glad to hear from you.

July 12, 2019

The Latest News and Numbers From Our Real Estate Market

We’re back once again for another real estate market update for the San Luis Obispo area. We’ll touch on what’s happened in the month of June, give you an update on interest rates, and take a closer look at real estate on a global level.

This past month, we ended with about 6% more homes for sale than in June 2018. At the same time, we had about 7% more homes go under contract and closed sales dropped by about 7% as well. This means that more and more homes are starting to fall out of escrow. If you’re a buyer or seller, know that you’ll have to compromise a little more so that we can get to the finish line of escrow.

Now, let’s take a look at interest rates. They’re still at historic lows right around 4%. A buyer can lock in a 30-year rate at that price right now, which is fantastic. If we go back 42 years, you’ll see that the average rate was over 8% more than half of the time. That really puts today’s low rates into perspective.

Finally, I want to talk about real estate in general and why it’s such a great investment. The reason real estate is so great is that it’s tax-preferred. If you own a home, you’re married, and you’ve lived in it for a few years, where else can you sell an investment and take up to $500,000 in tax-free gains? It’s unheard of. Additionally, you can deduct all of your mortgage interest, which you can't really do with any other type of investment unless you own a business. With real estate, you’re encouraged to take these deductions and they ultimately make the home more affordable.

As for investment real estate, my brother-in-law is nearing retirement and is using an addition to his property as a rental. If you own investment real estate like him, you can get passive income that also has preferential tax treatment.

In conclusion, we have a very steady market, historically low interest rates, and a preferred tax treatment that makes real estate an unbelievable investment. If you have any questions for me in the meantime or you want to take advantage of the current conditions by buying or selling, don't hesitate to give me a call or send me an email. I look forward to hearing from you soon.

June 11, 2019

What’s Happening Now in Our Market?

May has been the busiest month for real estate so far in 2019, and the current sub-4% interest rates are likely one of the main reasons why.

Of course, there are other factors at play, so let’s take a look at a few recent market trends.

Active listings are up 2% year over year, while the number of pending properties is up 10% and closings are up 3%.

Interestingly enough, however, there were 25% fewer listings this May than there were in May of 2018. If you’re thinking of selling, this is great news. After all, the fewer homes there are on the market, the less competition you’ll face when you list your own.

As I mentioned earlier, though, the main driving factor in our current market is interest rates. Right now, buyers can secure a 30-year home loan for as low as 3.5%. This is absolutely unbelievable. And for a seven-year fixed-rate loan, your interest rate could be as low as 2.875%.

Out of the last 46 years, there have only been five years during which the average interest rate was under 4%, like it is right now. This just goes to show that now is an incredible time to buy a home.

The bottom line is that, whatever your real estate goals, now is a good time to make a move.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

May 13, 2019

SLO County May Market Update...You May Be Surprised

For today’s market report, I’ve jotted down three things about our real estate market that I’d like to share:

What do the numbers tell us is happening in the market?

  • In the month of April 2019, we noticed that 30% more homes went into escrow than those that did in April of 2018. That’s a huge increase!
  • 20% more homes became active on the market over last year.

The fact that we have more homes going under contract than we have coming onto the market means that, as we go forward this year, we’re going to have a very stable market; we won’t see the price drop that we were anticipating months ago.

But what is driving these trends?

Interest rates are now near 4%, when, just a year ago, they were closer to 5%. This year, a buyer’s dollars will go a lot further. More importantly, if you, like many people, choose to get a 10-year fixed rate mortgage, your rates will be closer to 3.5%

So what does this all mean?

If you’re selling a house, buyers can afford more than they could even four or five months ago. You’ll be pleasantly surprised about how good the market is in terms of the price and terms you can get. If you’re buying a house, your monthly payment will be lower and your dollar will go further than it would in recent times. In general, I’d call this a “Goldilocks” Economy: It’s not too hot, not too cold, but just perfect.

If you have any questions about our market or the stats I’ve shared, don’t hesitate to reach out to me. I’d love to help you however I can.

April 9, 2019

3 Important Updates About the Market

As we look outside anywhere here in San Luis Obispo, you’ll see the amazing green hills, the full reservoirs, and the blooming flowers. It’s an amazing time to live here.

It’s also an amazing time to help people with their real estate goals. Given that, there are three points I’d like to cover today:

1. We’ve improved the service our team provides.  A year ago, our team made the decision to upgrade our service to our customers. To do that, we brought on three great agents: Melody Avant, Graeme Baldwin, and Devin Hahn. Between these three, we’ve added forty years of experience to the team. They’re also team players: If one of them is busy and needs help with a transaction, the others can jump in and ensure that the client’s needs are met.

They also put our customers’ best interests first, and this commitment is evident every day of the week when they deal with clients—those clients’ reviews speak for themselves.

2. Interest rates are excellent. Year over year, interest rates are down by 1%. That means if you’re a buyer, you’ll be able to afford more house, or the same house with a lower monthly payment. As such, sellers will have an easier time selling their houses and will be able to get a better price than if the rates were higher. If you own your own house but don’t have plans to sell, you can still benefit from the market by refinancing—you can get a lower rate and save money on your monthly payment. All in all, it’s a win-win scenario for everyone (except, maybe, for renters).

3. Is the market okay? We currently have the same number of homes available now as we did in the last quarter of 2018. The number of sales and pendings are slightly under where they were last year. If the fourth quarter of 2018 was amazing, the first quarter of 2019 has been pretty darn good, too.

Moving forward, we’re noticing more homes going under contract and leaving the market because buyers are snatching them up. Concurrent with that, we’re also seeing new homes coming on the market for sale, which draws down the inventory of available homes. If this continues, this means we’re in for a very stable, predictable real estate market. All told, we’re very fortunate to find ourselves in these market circumstances—they don’t come very often.

As a final note: Thank you so much for helping us get the most referrals we’ve ever had this past quarter. We could not have done it without your help and support.

If you need any assistance or have any questions about your real estate goals, feel free to reach out to us. We’re here to help.

March 11, 2019

Are We Seeing a More Mutually Beneficial Market Take Shape?

What’s the latest news from our San Luis Obispo real estate market? To answer that question, we’ll take a look at what kind of activity we’re seeing day to day and what the latest numbers show from last month.

First, I was recently notified that the last 10 homes our team has put on the market have sold in less than 21 days, and the list-to-sale price ratio for those homes was 100%. This doesn’t sound much like the shifting market we’ve been talking about the last several months, and the year-over-year numbers from last February point toward a bounceback to a more balanced market:

- Inventory increased by 9%

- Pending sales are down 3.6%

- Closed sales are down 11% - this makes sense when you think about it, though, because the homes that closed in February were the ones being negotiated over in November and December when the market was quieter

- New homes on the market are down 23%

That last figure is good news, because if that number isn’t increasing, it helps to stabilize prices. With interest rates dropping somewhat, and mortgage rates following suit, there are more buyers out purchasing homes. At this time last year, home sellers could’ve expected to get multiple offers, and although that’s not the case now, the offers they do get will be closer to their asking price.

If rates stay low like this, it will create a perfect storm for buyers and sellers. I don’t think I’ve ever seen a better, more balanced market for buyers and sellers than what I’m seeing now.

If you’d like to talk more about our current market and what you can do to take advantage of it, don’t hesitate to give me a call. I’d love to help you.

Feb. 5, 2019

The San Luis Obispo County February 2019 Real Estate Market Update

We’ve just finished the first month of 2019. Today I have some interesting information to share with you about the San Luis Obispo real estate market, as well as an update on interest rates and a tip about contingent offers.

As for our market stats at the end of January, inventory is up by 13% from where it was last year. At the same time, closed sales are down about 23% from last year. We’re getting more activity and the market seems to have some energy, but pending home sales are also down about 33%. We’ve been talking about this shift for a while and we’re finally seeing it.

One of the reasons that I think the market is still so healthy and active is because of interest rates. A client who just went into escrow is getting a conventional loan for a 30-year fixed mortgage for 4.375%. That’s the best rate I’ve seen in five or six months, if not longer. When I talked to the lender, I found out that you can get an FHA loan for 3.75% for 30 years.

When most sellers hear the words “contingent offer,” they’re hesitant. However, in this market, offers like this are more valuable. You’re trying to sell your house and buyers have choices. If your home is on the market for sale and you receive a contingent offer from a buyer who already has their home in escrow, this means they’re motivated to find a home and much less likely to back out. Take a serious look at contingent offers like this.

Based on all the information we’re seeing, buyers and sellers can take advantage of this window in the market. We’re not sure how long it will last. If you have any questions for me in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

Jan. 8, 2019

A Look Back on the December 2018 Market

As we begin the new year, I wanted to bring you an update on exactly what’s happening in the real estate world. First, what’s going on in the general market?

As we look back at December of 2018, it occurs to us that our inventory increased about 10%, which is a familiar point to us. Our sales were down 25% from the year before. In December 2017, we had 219 closed escrows, where in December 2018, we had 164—just for fun, we looked back on that figure for 2016, where we had 270 closings, meaning that there was a 40% decrease over the next two years. Additionally, there were 630 active listings when we closed out 2018. This all seems to indicate that the market is stabilizing.

Next, how do new listings compare to new pending sales?

If we have a lot more pending sales than we have new listings, that means our listing inventory will go down. If we have fewer pendings than new listings, that means our inventory will probably rise. As I glanced across the board for Los Osos, I saw that we had four new pendings and 11 new listings, meaning that we’ll likely have more inventory there. In Pismo, there were six new pendings and 13 listings, indicating a likely increase in inventory there, as well. The same is true of Atascadero, where there were 12 new pendings and 33 new listings. For those who have been wondering and complaining about a lack of inventory over the past few years, guess what? We’re going to have more options to choose from in our market.

Lastly, what do expired listings look like?

Expired listings refer to those who have cancelled, withdrawn, or had their contracts expire and are no longer on the market for whatever reason. In December of 2018, we had 237 expired listings. One year previously, we had 93. That means that 73% more people took their homes off the market in December 2018 than in 2017. However, when we measured the active inventory for that period, it still came out to be 10% higher, despite the number of homes removed from the market.

So what is this all telling us?

Well, if you’re a seller, you’ve got to be ready. Price your home competitively and do everything you need to with regards to preparing your home for the market. For buyers, you’ll have more opportunities to get more house for your dollar. All in all, this shift in the market is completely normal; we’ve been through situations like these before.

If you have any questions about these market changes and how they affect you, feel free to reach out to us.