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Before we get deeper into February 2020, I want to bring you a few quick updates. I have the latest market stats, as well as really important information for home sellers. First, let’s look at the market.
In January 2020, our inventory was down about 15% from where it was a year ago. At the same time, we had 20% more homes go into escrow. The fact that interest rates are hovering around 3.5% is a big factor. We have a very strong market right now.
Our team has put 17 homes into escrow in the last 14 days, which is a fantastic start to the year for us.
If we go back to 2018, we had a very strong start to the year in January, February, and March, but things slowed down for the rest of the year and we actually saw some softening of prices.
If we shift to 2019, the same thing happened all the way up until November. In November and December, we had a very strong finish to the year. These little windows come and go, but it’s good to know that there are opportunities out there for buyers and sellers in our market.
The second topic I’m covering is a question that I always get from home sellers around this time of year. They want to know what they should fix, remodel, or upgrade to get the most money out of their sale.
There are studies done every year that show things like kitchen and bathroom remodels are some of the best things you can do, but you’re still only getting 80 cents on the dollar in return. However, there are a couple of exceptions. If you’re handy and can do the job cheaper than contractors, it might make sense. If you’re not, there are at least four things I can recommend that should help increase your home’s value without breaking the bank:
Don’t go hog wild on renovations. Give me a call and we can talk about the simple, inexpensive things you can do to make sure you get the most money possible for your house.
At the end of the day, it’s a phenomenal time to be a home seller in our market right now. Rates are fantastic, inventory is low, and demand is very strong. If you have any questions for us or want to talk about your specific situation, feel free to reach out via phone or email. We’d love to help. Stay tuned for our next video, where we’ll have some great tips for homebuyers.
It’s time for our first San Luis Obispo market recap of the decade. Before we get there, as we look back on the past 10 years, we were fortunate enough to help over 1,400 families buy or sell a home. This means a lot to us because a lion’s share of those people came from past clients and referrals.
Now let’s take a look at the latest market statistics. If you remember last November, we had a really big jump in pending sales, which equated to a higher number of closed sales. In fact, we had 43% more closed sales in December 2019 than we did in December 2018. In the same period, inventory dropped around 10% to 13%, and our total sales were up by a little over 13%.
What does all this mean? First, we’re still the beneficiary of very low interest rates. It seems like these low rates will continue, which is good for both buyers and sellers in the market. We have a very stable market which will assist buyers and sellers.
Finally, I want to give a shout out to the wonderful people I work with. Here at our Flagship Re/MAX office, three great salespeople help me on the buyer’s side: Graeme Baldwin, Devin Hahn, and Melody Avant. The great thing about these three is that they work great as a team and anybody who works with them sees what a great job they do and how much they enjoy our work.
On our customer service side, Sharon Benedik has been helping me run, manage, and take care of all our listings and showings. She works nonstop and is a great asset to our team. Dakota, our escrow manager, is super organized, super friendly, calm, and the guy we want on our side during escrow. Lyn, my assistant, helps keep us all together and organized, which is not easy.
The second portion of our business here is Blue Heron Realty in Avila Valley. Patti, my long-time office manager, is great. Wina Gill, our newest addition as a salesperson, comes to us with previous experience. She just started last quarter, but everyone she has worked with loves her.
Lastly, we have our property management division, Castle Keepers. My wife, Maria, works there, as does our great operations manager Cyndi. If you take a look at their reviews on Yelp!, you’ll see why people love them so much.
If you have questions for us about real estate or need any help with buying, selling, or investing, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.
As we make our way through December 2019, what do the latest market statistics mean for buyers and sellers? What can we expect moving forward in January of 2020?
Before I get to that, I want to thank you for a great year and a great decade. As we always do at the end of the year, my team and I reviewed where our business came from in 2019. We found that 70% of it was from people we worked with previously or were recommended by someone we worked with previously. Our job is to have lifelong, raving fans as clients, and we’ll continue to do our best for you.
Now, onto our latest market statistics from last month. Year over year closed sales rose 5% compared to November 2018. The big news, though, is that pending sales have risen 49%. Inventory, meanwhile, is down 16%. Interest rates have also dropped from around roughly 5% to closer to 3%.
For buyers, this makes now an amazing time to buy. If you were to get a $500,000 loan right now, you’d be paying approximately $300 less per month than if you got that same loan a year ago. If you add that up year after year, that’s a huge amount of savings.
What about sellers? Many people assume we have a seasonal market, but we don’t. There are normally fewer homes for sale and fewer looky-loo buyers during this time, but the buyers who are looking are very serious. This makes now a great time to sell as well.
There are a couple of changes you need to be aware of once the clock strikes midnight on 2019. First, there’s a statewide rent control ordinance going into effect. Second, there’s a brand-new inspection you’ll need to get if you’re thinking of selling in San Luis Obispo. If you want to know about either of these changes and how they impact you, go ahead and give us a call.
I hope you have a wonderful holiday season, and if you have any other real estate questions, feel free to reach out to me as well. I’d love to help you.
Before I get into today’s real estate market update for the San Luis Obispo, I wanted to quickly remind you about our upcoming movie event. Join us on Saturday, December 7 for our movie event at the downtown center cinema. We’re getting close to filling up our screening of “Frozen 2,” so sign up here now or give us a call at our office to reserve your spot.
Now, let’s talk about the latest numbers from our real estate market and what they mean for buyers and sellers. Last month, our inventory dropped by about 9%, which is typical for this time of year. However, the number of closings we had in October was up by 22% from what we saw in October 2018. This could have something to do with mortgage rates dropping from 4.9% last October to 3.5% this October.
Another thing that we noticed is that the number of new homes coming onto the market is down significantly from a year ago. We’re starting to see an increase in new construction homes that are competing with resale sellers. I think the trend of buying new construction could continue, which presents an opportunity for both homebuyers and sellers.
If you're thinking of selling your home, the timing is probably pretty good right now. If you’re not on the market , call me immediately so we can perfectly time this process.
As for homebuyers, know that interest rates have a huge impact on what you can afford, and they’re very low right now. When you couple that with motivated sellers and new construction incentives, it’s a great time to be a homebuyer, too.
At the end of the day, we have a strong, solid market. Pricing is important for sellers, and rates remain low for buyers. If you have any other questions for us or if we can help you in any way, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.
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.
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.
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.
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.
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.