Case-Shiller Reports Home Prices Up 3 Months in a Row!

Although inventory available for sale is at historically low levels, the recent news on price trends is positive; For the third consecutive month, the Case/Shiller Index of 20 major cities (with California represented via Los Angeles and San Francisco) was up in each of the 20 cities (measured month to month), AND the composite was up as a whole based on year earlier prices (measured year on year).   This is probably the most positive real estate report since the peak of prices in 2006 – 2007.

The Central Coast mirrors the national situation; Inventory is tight, and prices have firmed.  For the first time in recent memory, optimism outweighs pessimism.

The S&P/Case-Shiller Home Price Indices are the leading measures for the US residential housing market, tracking changes in the value of residential real estate both nationally as well as in 20 metropolitan regions. Read more at




The Appraisal Contingency – What Does This Mean?

Home buyers and sellers on the Central Coast are keenly aware that Short Sales and bank owned properties have put downward price pressure on housing prices.  Although these sales are quickly coming to an end, and the market is quickly beginning to stabilize, the carry over effects of the short sales still remain when appraisals are conducted.  As such, some homes may have appraisal values below the asking price.   Because banks will rarely lend more than the amount of the appraisal, a potential “funding gap” is often the result.   Some sellers, in a move to circumvent the issue may require buyers to remove the “appraisal contingency” which means that if the appraisal is less than the asking price, the buyer must cover the difference with cash.


Cal Poly and Our Community

Cal Poly culture permeates throughout the county but is a defining element in SLO. While at the SLO Chamber of Commerce yesterday, I over heard an interesting conversation. (Ok, I was eavesdropping in line.) A tourist asked, “what’s the seasonality in SLO? How is it defined?” The Chamber representative answered “When the students are here and when they are not.” She went on to explain that in their absence, it’s quiet and wonderful; July to early September is her favorite ‘season’.

I have to agree with her statement. The rest of the year we see a 50% increase in population which elevates the noise level and activity is heightened. But I love that. The vibrant energy the students bring gives downtown SLO an ever-active appeal. Us locals can forget that they are a driving force of our economy and that they perpetuate a large portion of our real estate transactions.

Maybe I just have an added appreciation for Campus and Student Life because it was only a decade ago that I graduated into the ‘professional’ population. Regardless, it is significant in our community and a dynamic resource that I encourage you all to tap into. For starters, Poly is hosting the Ted X SLO tomorrow! This all day seminar boasts an impressive line-up of speakers who are all accomplished leaders of their industry. Tomorrow’s topic revolves around Community.

Cal Poly Campus

For more Cal Poly Happenings, check out Cal Poly Magazine online.

Not “Upgrading” my IPhone/IPAD

Being a techie geek, I always want the latest and greatest tech stuff. I’ve received the upgrade popup on both my Iphone and IPad but have not clicked it. Why???   One reason….Google Maps.

My daughter upgraded her IPhone to the latest IOS which replaced Google Maps with Apple’s Maps which they get from Tom Tom. While the turn-by-turn instructions have been enhanced in the Apple Maps, showing traffic jams is a big disappointment.

We were in SLO the night before last and when traveling there, there was a car accident on 101 in Shell Beach in addition to the normal slow down entering Shell Beach going South.  The Google Maps showed the slow downs (yellow) and the stoppage (red) on the map for each direction.  The Apple Maps….NOTHING.  We did look a bit later and it did have some dotted red lines around the Shell Beach area of the accident but it was pretty lame, IMO.

I’m traveling to Los Angeles next week and the Google maps have been EXTREMELY helpful before when I’ve traveled to LA (and any other place).  Google maps is one of my favorite apps on my Ipad/Iphone.

I think I’ll wait until Google comes out with a stand alone maps application that I can download before I upgrade to the new IOS…which may be awhile.

Major stock indexes up 4 percent in September, economic data mixed

To begin the month, we mentioned that September has historically been the worst month for stocks. Even after stocks closed slightly lower after a week of (relatively) uneventful trading, the major averages are still up 4 percent on the month. Stocks have been spurred by major Central Bank action, beginning with the European Central Bank’s plan to purchase government bonds and stabilize the tricky European sovereign debt situation. Then, last week, the U.S. Federal Reserve announced QE3, an ambitious bond-buying program to keep rates low, stabilize the mortgage market, and ultimately combat unemployment. The stimulus plan spurred major stock indexes to close at multi-year highs.

The 10-year Treasury yield, which tracks mortgage rates, closed last Friday at 1.7648 percent. Mortgage rates generally fell during the week, as Freddie Mac reported that at 3.49 percent, the “national average” for the 30-year fixed was a record low. Our 30-year fixed rate shaved off 0.059 in APR during the week, to finish well below the national average: 3.250 percent (3.242 percent APR). For a full rundown of the rates, see HERE.

Articles of note:

The New York Times discussed the difficulties of refinance, and profiled the people who need it most but often don’t qualify – underemployed and debt-strapped family. The article addresses the question: what steps can these folks take to ultimately qualify for refinance and the thousands in monthly savings it offers?

Did Obamacare implement a 3.8 percent tax on home sellers? Jason Grote addresses the rumor that a “sneaky” clause in the new health care law will implement a 3.8 percent tax on profits from real estate sales. Check it out… but the short answer is that this is a gross exaggeration.

To buy or not to buy: Central Coast Lending makes the argument why now is a good time to consider taking the plunge and buying a home. Besides the obvious benefits of low interest rates, demand in the renters market has caused rent prices to skyrocket. A recent Trulia report notes that it is cheaper to buy a home than rent in the nation’s 100 largest Metropolitan areas.


Numbers from the week:

  1. Home builder confidence has reached a five-year high
  2. Weekly jobless claims came in at 382,000, just 3,000 lower from the previous week
  3. August housing starts came in at a 0.750 million unit yearly pace, which is up over 29 percent from last year
  4. August existing home sales rose 7.8 percent from July to a pace of 4.82 million. This is the best pace since May 2010.

What’s your Style?

Realtor magazine has compiled one of the best architecture references that I’ve come accross. It covers both residental styles and individual structural elements. As you likely know, San Luis Obispo-and the County at large-has an ecclectic range of architectrual appeal. Diversity is seen not only block to block or street to street, but more commonly, house to house!

Here’s the Link: Achitecture Guide

Enjoy clicking on each home icon for definitions of the style and era along with further details and history. You may find that your home’s style is a combination of two or more.

In my experience working with buyers, the homes with the most architectural consistency, regardless of the style, have the most appeal.


Plastic Bags Banned in SLO County

Effective October 1st, plastic bags will be banned in San Luis Obispo County.  This ban applies to single-use plastic bags at supermarkets, pharmacies, convenience stores, and big-box stores as part of an effort to encourage shoppers to bring reusable bags.  If shoppers forget their reusable bags, they can buy a paper bag for 10 cents.  The ban on plastic bags does NOT apply to smaller stores under 10,000 square feet.

San Luis Obispo County is now the 15th community in the state to pass a ban.  About 130 million plastic bags are used each year in the county alone, and only 3% of that is recycled!






Federal Reserve’s quantitative easing announcement sets markets swirling

The three major U.S. stock indexes (Dow, Nasdaq, S&P 500) set five-year highs (12-year for Nasdaq) after the U.S. Federal Reserve announced its latest round of monetary stimulus. Mortgage rates fell slightly after the announcement, but have mostly remained steady. Over the long run, the quantitative easing strategy (QE3) should keep rates low if not push them lower, but for now the 10-year Treasury yield has grown to 1.85 percent (from 1.59 percent at the beginning of the month) as equity rallies have moved investors out of Treasury bonds and into stocks.

So what is this announcement all about?

The Fed will purchase about $40 billion in mortgage-backed securities per month until the economy shows adequate improvements. In total, by continuing other monetary policies (such as operation twist) the Fed will increase its long-term holdings by $85 billion per month. Through the twists and turns of monetary chemistry, the Fed hopes to keep interest rates low, stabilize the mortgage market, support real estate market, and ultimately bring down the pesky unemployment rate. The relatively unprecedented part of this plan is the “open-ended” clause, which says that they will continue the policy for as long as they see fit.

We have covered the event in three parts:

Part 1: Overview of the plan

Part 2: Response by economists & politicians

Part 3: How this action will affect interest rates

Stocks have now rallied on action from both the U.S. Federal Reserve and the European Central Bank, which has prompted analysts to question if the market rally has an underlying strength to it.

Switching gears now, CoreLogic has reported that there are 1.3 million fewer underwater homeowners thanks to rising home prices across the nation. Down from a peak of 12.1 million loans, there are now 10.8 million mortgage holders who owe more than there home is worth.

Lastly, we have seen two significant pieces of data that suggests now is the right time to buy a home. For one, a recent study by Trulia in the nation’s 100 largest metropolitan areas suggests that it is 45 percent cheaper to purchase a home rather than rent one – if the occupant will remain in the same home for at least seven years. Rent costs have outstripped the rise in home prices, and the low interest rate environment has significantly lowered closing cost scenarios and monthly payments.

ClearCapital gives us the other piece of good news in its Home Price Index – even as distressed property (REO) saturation in the market has decreased, home prices continue to improve, as demand for single-occupant “fair market” priced homes are on the rise. In other words, the market is being driven by average consumers instead of investors looking for a deal on a foreclosure home. You can read more on our report HERE.

Rates to begin the week are 3.250 percent (3.301 percent APR) for the 30-year fixed and 2.750 percent (2.738 percent) for the 15-year fixed. For more, go HERE. For how we calculate our rates, please see THIS post.

Please feel free to visit us on our website: We update mortgage rates every morning, and we cover mortgage, real estate, finance and economic news daily.

Paso’s Culinary Arts Academy

Our little hamlet is full of surprises….my recent stumble takes me to the Culinary Arts Academy who a personal chef friend of mine routinely goes on and on about.  The main function is as a training academy for local high school and college students to obtain a taste of what it is like to work in the food industry.   They serve breakfast (8 to 10:30am) and lunch (11:00am to 2pm) Tuesday through Friday from the large, clean and friendly location at 1900 Golden Hill Road.  The Academy caters large and small groups from weddings to RV groups to business meetings and events.  They also provide school meals for 4000 – 5000.  During my visit, my attention was immediately drawn to a huge platter of generous cookies that can be ordered the night before for $2.50 a dozen…….  Then I was treated to the days special of Jamaican Curried Pork……, well spiced, made from scratch and simply delicious!  I am going back for breakfast soon and a crazy sandwich called the Shrimp Club (only $6.25!) They acknowledge that they are a well-kept secret as they can’t advertise through the standard avenues.  This is a place that is definitely worth checking out!!!