Team Sweasey's Real Estate Blog

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 24, 2019

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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.

Jan. 3, 2019

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Dec. 11, 2018

Your November Market Update for San Luis Obispo

As the year wraps up, we’d like to first thank you for all of your continued support. Our business would be impossible without all your help, and we are so very grateful to all of you. Secondly, we’ll share a quick update on the latest statistics from the San Luis Obispo real estate market.

As has been the case for the last several months, we saw an increase in inventory this November, as well as a little bit of a reduction in sales. Specifically, inventory has risen by 15% year over year, while closed sales were down by a little over 15% during that same period.

At the end of the day, there is still plenty of opportunity in our real estate market. Good buyers and sellers are still out there, just perhaps not in as great a volume as before.

So what does this mean if you’re looking to buy or sell? Ultimately, you should proceed as you would any other time. If you’re a buyer, one of the first steps you should take before beginning your home search is to partner with a strong local lender. You may know someone who offers this service but lives outside of our area, but the truth is that only professionals who live and work in the San Luis Obispo market will know how to get you the best possible deal. The same logic applies to real estate agents. Our team would be happy to serve you or put you in touch with professionals who can do so in your specific area.

The final thing we would like to share with you today is the fact that conforming loan limits are set to change on January 1, 2019, at which point the limit will be $484,300.  Last year, those with the most favorable rates enjoyed a limit of $417,000. As you can see, this means that the coming change is going to be quite a jump from where we are right now. Following the change, those interested in borrowing or refinancing will be able to secure a little more money for a slightly lower cost.

If you have any other questions or would like more information about anything we discussed today, feel free to give us a call or send us an email. We look forward to hearing from you soon.