KSBY has their 2nd part of their series on the local home market. (read article here) In it, they report the following median home price changes from the peak of 2006 to 2007.
Santa Maria Valley: -14.5%
San Luis Obispo: -11%
Cambria to Los Osos: -6.4%
Paso Robles, Templeton: -5.5%
Atascadero, Creston, Santa Margarita: -2%
Interesting…San Luis Obispo has had the lowest Months of Inventory over the past two years so having it the second largest price drop doesn’t add up. From the Median Home Price calculations I do on the SloWatch.com site, here are the median price percent changes from 1st half of 2006 to 2nd half of 2007. These calculations are specfic to single family homes (no condos, PUDs, mobiles):
Arroyo Grande homes: -27.4%
Atascadero homes: -9.9%
Cambria homes: -9.1%
Cayucos homes: +0.3%
Grover Beach homes: -10.0%
Los Osos homes: -14.4%
Morro Bay homes: -20.7%
Nipomo homes: -14.7%
Oceano homes: +2.9%
Paso Robles homes: -11.0%
Pismo Beach homes: -2.8%
San Luis Obispo homes: -6.5%
Santa Maria homes: -26.5%
I wouldn’t focus too much on the cities with a low number sales over the time period (Cayucos, Oceano). If you want to look more at the details on what homes sold in what price ranges over this time period, go to the www.SloWatch.com homepage and scroll down to city stats and choose “Sold Report” for a particular city. For example, Arroyo Grande had 27 homes over $1M sold in the first half of 2006 compared to 16 for second half of 2007. The highest priced home in 1H 2006 was almost $3 Million compared to a little over $2 Million in 2H 2007. This could explain some of the median price change in AG.
I’ll be doing the 1st Quarter 2008 median price calculations at the end of March.
The wireless word is out!
Jack in the Box is secretly testing FREE Wi-Fi access at 10 of their restaurants in Arizona and California and two are on the Central Coast. The one in San Luis Obispo and a Santa Maria location at 830 Broadway are reported to have the free Wi-Fi access with plans to add access to other Central Coast restuarants in April and May.
To connect, go into the store and get the 5 digit access code that’s displayed on the TV in the store. The SSID network name is “jackwifi”. You are able to get 2 hours of free Internet access every 12 hours. Now you can search SloCountyHomes.com while eating those Jumbo Jacks!
And while I’m on the topic of fast food, the Shamrock Shake is back at McDonalds. It’s been a few years since the area McD’s have had the Shamrock Shake but we got it this year.
Tonite on the TV news I saw a report on a conference on the home market that recently took place in the North County. The news report talked about a real estate professional at the conference stating that prices may have bottomed out and the lions share of depreciation has already happened.
I decided to take a look at the current numbers for North County to see if things have changed that much since the first of the month. In Paso Robles, inventory has dropped slightly from 457 active homes on 2/1 to 450 currently. Months of Inventory (MOI) stands at 19.6 months, down from 21.8 on 2/1.
For Atascadero, inventory has risen from 265 on 2/1 to a current count of 284. Months of Inventory is at a whopping 32 months.
As you may already know, 6 months of inventory is considered to be a neutral market. More than 6 months is a Buyers market. A market over 12 months is an indication that price reductions need to happen.
I would have liked to have heard this presentation first hand to see if there were any facts presented to back up the opinion that prices have bottomed out. But with the data that I’ve looked at, it doesn’t appear prices have come close to hitting bottom yet for the North County. There may be some neighborhoods that have depreciated faster because of a foreclosure or a home priced at what it takes to sell today which is why your Realtor really needs to do a lot of homework before you list your home. If Realtors send out the wrong message about the market to homeowners wanting to sell, the owners may sit on the market with an overpriced home as the pricing curve continues to decline. That will increase inventory even further which will create stronger downward pressure on prices. You lose money when you don’t sell month after month in a declining market. I hightly doubt this market is going to bottom out tomorrow and then appreciate 5-10% in the next few months to catch back up to the point where a lot of homes are currently priced at.
If you are sitting with a house for sale in a market with 32 months of inventory, you NEED to get in front of the pricing curve to have a chance of selling. Chasing it as it declines (or not taking any pricing action when your home isn’t selling) will not give you many chances of selling, just lots of frustration.
If you do have your home on the market for many months now, I’d contact your Realtor and insist they present to you what it will take to sell your home in the next 30 days. If they don’t provide you with a detailed analysis on current market conditions and only a recommendation based on their “opinion” without any data to back it up, I’d look to see if you can terminate the listing agreement and find a Realtor who understands what it will take to sell in this market.
If you are a Buyer, do you want to go with a Realtor that believes prices have bottomed out with an inventory sitting at 32 months? There is plenty of data to analyze to see what a good offer price is for a home. If a Realtor thinks prices have bottomed out then they are probably going to recommend going in at list price. Depending on the home, you could be overpaying. I’m not recommending low ball offers, just encouraging you to perform the same pricing analysis on a home as if you were going to sell it to come up with the fair market value.
I updated both the Just Sold and REO reports.
http://www.slocountyhomes.com/just_sold.htm
http://www.slocountyhomes.com/reo.htm
For the Active REO listing report, I had to break Santa Maria into Northern and Southern sections as the number of active foreclosures/short sales exceeded 300, which is the max for my reporting program.
Here’s a chart from a Homegain survey on what items returned the most on the investment in Sales Price. (you’ll need to click the chart to display it large enough to read it.) The survey showed that spending a few hundred dollars on cleaning and decluttering generated the most Return On Investment (ROI).
I found a really cool program to quickly touch up portraits you take with a digital camera. It takes less than 2 minutes per photo, a lot less time than doing it in Photoshop and you don’t need to be a Photoshop pro to do it!
The program is available here-
http://www.portraitprofessional.com/
You can download a trial which will let you work on your own photos to see how it’s done and how they will look but will not save without a big “Preview” on the photo.
I tried it on a bunch of photos I took of my daughter’s friends for their winter formal last week and the program worked so good (and quick) I purchased it!
Here’s an interesting article sent in by a blog reader about pricing your home using sometthing other than 000 at the end.
I briefly looked at recent homes have sold at and didn’t see the properties ending in 000 getting a lower percentage of list price than those ending with 500 or 900 in their price. I’m sure there may be a good reason to do this just like pricing something for 99 cents vs. 1 dollar. In the past, I’ve priced properties with 990 at the end. Maybe I’ll try something like 943 at the end next time to mess with people’s heads but not sure if 500 would do anything other than listing the home 443 dollars less.
But, I do agree that you do need to price today thinking about people searching the Internet. Most searches have drop down menus for prices. If I had a home worth $800,000, I wouldn’t price it a $800,000 since you’d miss people searching “lower than $800,000″ category, just as I wouldn’t price at $776K because of the $775K drop down choice.
If you are signed up to receive new listings notiication and have a Yahoo email address, you may have noticed that you aren’t getting them. Yahoo is currently refusing delivery of emails from my vendor that sends out the new listing updates. If this effects you, I’d send Yahoo an email with a forward of one of the new listing update emails and tell them you want to receive emails from them.
The Central Coast real estate market has picked up in the last week. Halfway through the month we’re at 204 Pending Sales (vs. 87 for the first 7 days). New Listings are at 318 and price changes are 427.
If this continues, we should break 400 Pendings for the month. We haven’t seen that since last July (and February is a short month)!
