As of yesterday, here’s where we are at with Home activity in San Luis Obispo County:
290 New Listings
175 Pending Sales (48 REOs, 26 Short Sales)
The same 22 day period in June of 2009 was:
264 New Listings
178 Pending Sales (31 REOs, 23 Short Sales)
This data isn’t too promising for Home Sellers. Increased inventory, slow sales volume, and an increase in the foreclosure percentage does not indicate that the market has bottomed out in SLO County.
If you’re like me, you probably visit a few local news websites each day to find out what’s going on in the area. I created a page on my Local Links.com site that makes it easy to check headlines from multiple sources (Telegram Tribune, KSBY, Santa Maria Times, New Times). The page uses what are called RSS feeds from these news sources so the headlines are updated constantly. Just click on the red title of the story if you want to read more than the summary provided.
Mixed economic data and tame inflation figures were favorable for the mortgage markets this week. Retail Sales unexpectedly tumbled in May, down 1.2%, the biggest drop in eight months. The Empire State manufacturing survey general business index showed an 11th consecutive month of growth. May Building Permits were down 5.9%, and Housing Starts fell 10%. Mortgage Applications jumped to a five-month high. Initial Jobless Claims were up 12,000 from the previous week, and continuing claims also rose, while the Unemployment Rate fell in 37 states. Gold prices rallied to a record high of $1,260.20 an ounce on Friday, rising nearly 15% since the end of 2009. Unable to determine if economic growth is for real, or if government stimulus is delaying the inevitable “double dip”, investors remain content with the relative safety of US treasuries including mortgage-backed securities. The low inflation data released this week means there is little pressure on the Fed to begin raising the benchmark lending rate. The Producer Price Index was down 0.3%. Core PPI, excluding food and energy costs, was up only 0.2%. The Consumer Price Index came out as expected, down 0.2%. Core CPI rose at a 0.9% annual rate, the lowest level in four decades. Currently, the 30-Year Fixed is at 4.375% ( 4.523% APR) and the 15-Year Fixed is at 3.750% (4.012% APR). All eyes will undoubtedly be watching the Fed meeting on Wednesday. No change is expected in the fed funds rate, but investors will be watching the language closely for any hints about future Fed moves. We will also see Existing and New Home Sales and Durable Goods Orders.
While the national economy continues to struggle to gain traction, the California real estate market took a definitive turn for the better last month. The median home price in California surged 20.9% from May 2009. The median price for May was $278,000, up from $230,000 a year ago, and up 9% from $255,000 in April. The May median price, which marked a seventh consecutive month of year-over-year increases, was at its highest level since October 2008. Sales of homes costing more than $500,000 made up 21.2% of all transactions in the state, up from 16.5% a year ago. Inventories of low-cost foreclosures and short sales dwindled, comprising only 35.5% of sales, down from nearly 50% just a month ago. In fact, real estate agents in many areas of California are reporting too little inventory for the current demand levels, especially at the lower end of the price spectrum. A little closer to home, the median home price in San Luis Obispo County fell 2.7% from $370,000 in May 2009 to $360,000 last month.
Each year, NEWSWEEK picks the best high schools in the country based on how hard school staffs work to challenge students with advanced-placement college-level courses and tests. Just over 1.600 schools—only 6 percent of all the public schools in the U.S.—made the list.
Two Central Coast High Schools made the list.
Arroyo Grande High School is #561
Templeton High School is #1364
I wasn’t thrilled with the quality of the Pismo Beach webcam so I installed another type today. Hopefully it will show off those classic cars in the car show better.
If you’re going to the car show, make sure to stop by the Taffy store and get some of that yummy Motor Oil ice cream, made special for the car show by Doc Burnstein’s.
I saw some DVDs at Best Buy that had the BluRay movie on one side and a regular DVD movie on the other side. I hadn’t seen this before and I think it’s a really good idea. This will make it easy for Redbox to add BluRay rentals as they only need a single disc. I might even rebuy some of my favorite movies for BluRay if it was this combo disk and priced at $10.
Just in time for the Pismo Car Show which starts today, we have a new Pismo Beach Street Webcam., Thanks to Tomasko’s Salt Water Taffy for allowing us to put the camera in their window.
You can access the web camera here:
If you need more information on the Pismo Car Show, click here
Another analyst company came out with their guess of how much shadow inventory there is. Shadow Inventory are the homes yet to move through the foreclosure process. Standards and Poor looked at 20 metro areas and found that it would take an average of 3 years, at current sales pace, to clear the shadow inventory. What they found was there was a big difference between areas from a low of 18 months of inventory for Phoenix to 103 months in New York City.
Yesterday I read an article from some Mortgage analyst stating that interest rates will gradually rise to 6% by the end of next year. I’ve seen other economic predictions that median home prices will flatten out and start rising next year.
It’s really fascinating to me to read some of these analyst predictions. I really don’t think some are looking at all the factors that may effect where the housing market will be in the next few years before they make their prediction.
Here are the main factors I see that will drive any local real estate market in the upcoming years.
Simple supply and demand economics. More inventory = increased competition, especially when the sales pace is slow.
- Sales Pace
The sales pace determines Months of Inventory which is how much time it will take to sell the existing inventory. Using the Months of Inventory calculation, 6 months is a neutral market, above 6 months is a Buyers Market (which typically means homeowners need to lower their price if they want to sell).
It’s already been proven that REOs are priced aggressively, bringing down home values in a neighborhood. SLO County is between 30-40% of recent sales in the MLS being distressed (REO or Short Sale). That’s a pretty hefty percentage.
- Mortgage rates
If interest rates go up, people can afford less of a house. If 1% change effect 7% of what someone can afford, who’s going to pay for the 7% hit? The Buyer or Seller? To me, it will depend on what’s going on with inventory, sales pace, and foreclosure percentages!
I don’t know if anyone has a crystal ball to predict where all these factors are headed.
What I do know is that every real estate market is different. Even in SLO County, we’re seeing different inventory level trends and foreclosure rates between individual cities.
If you have purchased computer, ethernet, or video cables at Best Buy you’ll know they aren’t cheap. The best place I’ve found for cables is Fry’s. The problem is the closet one to the Central Coast is in Oxnard. I have found that the Cal Poly bookstore also has decent prices on cables. They have video cables too so it may be worth a visit for you to see how much you can save.
When I was there today, I overhead an employee talking to a student about purchasing a Mac. They said that if they purchase it at Cal Poly vs. a SLO Mac/Apple store, they’d save on the sales tax as Cal Poly is 8.25% and SLO is 8.75% (that would be a savings of $5 on a $1000 computer).
I wondered what the sales tax rates were currently in other cities so looked it up and I’m including it below.
ForeclosureRadar released their latest foreclosure report. For SLO County, Notice of Defaults, Notice of Trustee Sale, and REOs are pretty much at the same levels as a month ago and a year ago while Santa Barbara County has had a significant drop in foreclosures as compared to May 2009.