News & Info

News you can use, from Randy’s desk to yours

May 29, 2015

Fun Summer Events in San Luis Obispo County

Summertime here on the central coast is never lacking things to do. Besides the ever popular beaches, hiking/biking trails and beautiful wineries, there are many other fun events to keep you busy while school is out and the weather is warm.  Check out some of our favorites below:

Summer 2015 postcard front_001

May 14, 2015

Annual “RE/MAX Vs. the Industry” Report

The numbers in it are staggering. The report shows that RE/MAX Associates:

  • Averaged twice as many transaction sides (16.6) as most national competitors (as shown in the REAL Trends 500) last year.
  • Closed 180,000+ more U.S. transaction sides than Coldwell Banker.
  • And almost 200,000 more than Keller Williams.
  • And more than double Century 21.
  • Also, that RE/MAX led all major franchises in TV share of voice and global presence.

Thanks to all our hard working RE/MAX Agents as they continue to out shine our competition, nearly 2 to 1!

REMAX Industry Leader 2015_001

 

 

November 7, 2014

12th Annual Gently Used

toy drive train

A Different Kind of Holiday Toy Drive!

Wanted:    New or Gently Used Toys

WHAT?    It’s that time of year once again for the 12th annual toy drive to benefit local families in need. THE TOYS DO NOT NEED TO BE NEW, but should be in good condition. Of course we will accept new toys, as well as non-perishable holiday food items. Our goal is to brighten the lives of at least 150 qualified families this year!

WHEN?    Donations are accepted Monday through Friday, from 9am to 5pm starting Monday, December 1st and the last day will be Friday, December 19th, 2014. We will also be happy to pick them up by appointment!

WHERE?    Toys and food items may be dropped off at either of RE/Max Del Oro Realty two locations. Our San Luis Obispo office is located at 857 Santa Rosa Street (on the corner of Mill and Santa Rosa streets) and has a parking lot behind the building, accessed on Mill street. Our Arroyo Grande Office is located at 214 E. Branch Street in the Village.

For more information or assistance please call

our San Luis Obispo office at (805) 781-8101

A very special thank you to our generous sponsors of this program!

 

 

 

February 7, 2011

WHAT’S HAPPENING IN THE LOCAL REAL ESTATE MARKET?
FIVE YEARS OF MARS* DATA

It’s been five years since we began collecting and analyzing San Luis Obispo County real estate data here at Re/Max Del Oro. We now have a comprehensive look at how this market has performed over the past five years from many different perspectives. The MARS* (Market Activity Ratio Statistic) analysis was formulated back in January, 2006 in an effort to evaluate the supply and demand component of our local market.

The MARS* index is calculated by dividing the number of new escrows by the number of new listings for a given time period. We’ve recorded these numbers every week for the past 260 weeks. When the MARS* index is an even “100”, this means that the exact same number of listings came on the market (supply) that week as were “sold” (demand) in that same week. For MARS* purposes “sold” means an escrow was opened; or someone made the decision to buy a property. A MARS* under 100 indicates that supply exceeded demand, over 100 indicates that demand exceeded supply. Here is a look back at the average MARS* for the past five years:

AVERAGE AVERAGE MONTHLY

YEAR                MARS*        INVENTORY   HOMES IN ESCROW

2006                    59                     2,071                384

2007                   65                      2,281                307

2008                    81                     1,946                 296

2009                  113                    1,600                 439

2010                  113                      1,549                532

One of the most important facts derived from the above statistics is the average number of homes in escrow during each of the past five years. 2010 saw a dramatic rise in this number. This increase actually became apparent back in July of 2009, giving us 18 months of higher demand indicators. It is easy to conclude that demand has exceeded supply for the past two years. This may be attributed to greater consumer confidence in the economy, historically low interest rates, government tax incentives, more distressed sales, and low prices.

Another important fact is the historic low inventory level that we currently have. This number is for single family homes and condos on the market in San Luis Obispo County. Inventories peaked in 2007, and have been steadily decreasing over the past three years, with the 2010 inventory level 32% lower than the peak. Also, there is not a significant difference between 2009 and 2010. This shows that our inventory levels may be stabilizing.

Other conclusions reached from our analysis include a reduction in the average length of time a home stays on the market. This number reached an average peak of 136 days in 2008, and has dropped to an average of 116 days in 2010. While this is just shy of a three week reduction in average marketing time, it indicates a trend that is decreasing. In 2006 the average number of days a home stayed on the market was 94. During 2006 we saw the average go from 82 days at the beginning of the year to 127 by the end of the year. 2006 was definitely a pivotal year in many respects.

For more details on market activity please visit www.RandySteiger.com

December 13, 2010

THE LAST THREE YEARS IN OUR LOCAL REAL ESTATE MARKET
A significant shift occurred in our local real estate market in 2009. With the worst of the trends starting in 2006, the next three years saw steady declines in market statistics. This was evidenced by high inventories, low sales, higher number of days on the market, etc. In 2009 all this changed dramatically. Here’s a look at the numbers over the past three years:
2008                   2009                     2010
Total New Listings:                            4,327                   4,052                   4,444
New Escrows Opened:                        3,467                   4,837                  4,842
Avg. Annual Inventory:                    1,946                    1,600                  1,568
Avg. Days on the Market:                  136                       125                   112
Avg. Homes in Escrow/Month:           296                      435                     540
Avg. MARS*:                                       81                       113                       109
JUST THE FACTS PLEASE…
NEW LISTINGS COMING ON THE MARKET: There were about 8% less new listings that came on the market in 2009 compared to 2008; and then that number increased by about 10% this year. Perhaps many sellers were encouraged by the increase in activity in 2009 and decided to enter the market. Certainly there was an increase in foreclosed homes and short sales. Still, in 2006 there were a total of 6,023 homes that came on the market, or approximately 27% more than this year.
NEW ESCROWS OPENED FOR THE YEAR: Now I know most media reports reference closed sales, which I agree is an important statistic. However I like to look at the number of new escrows opened in any given period of time to more accurately capture the measure of DEMAND for houses. We know that when an escrow is opened that represents the decision of one buyer to purchase a home. And yes, I know there is a percentage of escrows that never close, but again I’m interested in measuring demand.  That said, let’s look at demand over the past three years. We saw a jump in demand of 40% from 2008 to 2009! This is incredible when you really stop to think about it. AND, the number of new escrows opened in 2009 and 2010 are virtually equal. We can safely argue that demand has remained steady over the last 24 months, on average. Why? Most likely low interest rates and low prices.
AVERAGE INVENTORY: There is no doubt that there is an increasing trend in the number of homes on the market this year over last. However on average we’re virtually the same as last year, and nearly 20% lower than in 2009. So we can make another very safe observation that supply has continued to remain relatively low while demand has remained consistent for the past two years. I think this is great news.
SAVING THE BEST FOR LAST: Notice the trend in the number of days on the market. In the past 36 months we’ve seen an approximate 10% reduction in the average number of days it takes to sell a house. We’re currently at 109 days this year, down from a high of 166 back in December of 2008. Our MARS* numbers have remained over 100 on average for the past two years, meaning demand has exceeded supply in “real time”. Best of all: We have averaged 540 homes in escrow so far in 2010; which is an increase of 24% over last year! Now that’s a nice note to end on, don’t you think?!
For more details on market activity please visit www.RandySteiger.com; and please feel free to contact me if you have questions or suggestions for topics you’d like to see covered in this column. I am grateful for this opportunity to be a resource for real estate information in our community!
*The MARS index (Market Activity Ratio Statistic) is obtained by dividing the number of new escrows opened in a given period of time by the number of new listings in that same period of time, then multiplied by 100. The number is basically the percentage of new listings that are being offset by new escrows. The higher the MARS, the hotter the market.
November 7, 2010

WHAT’S HAPPENING IN THE LOCAL REAL ESTATE MARKET?

A few weeks ago I had the great privilege of hearing Carole Rodoni speak at a seminar sponsored by our friends at Re/Max Parkside Real Estate in Paso Robles. Carole has extensive experience with the real estate industry in the San Francisco Bay Area and exemplifies what I consider to be a hard-core economist. Once she begins speaking she does not stop, and you wonder how she even gets a breath in. She is of small physical stature but immense in her passion and knowledge of the real estate industry. I want to share some of her wisdom with you now.

One of the most simplistic, yet most under-rated concepts in my opinion is the question: “What is happening with the real estate market?” Carole quickly pointed out that there is no global, or even national real estate market. Regional markets are unique and heavily influenced by local economics, demographics, industry health, adjacent communities, etc. For instance in the Bay Area we have a market like Palo Alto where multi-million dollar homes are getting all-cash, multiple offers. However within a 30 minute drive you have homes in the East Bay that aren’t selling at any price. We absolutely see that same phenomenon here in San Luis Obispo County.

She referenced the decade between 1995 and 2005 as one in which consumers “bought the sizzle and not the steak”. Real estate was viewed as a means to get rich quick, and homeowners with rapidly increasing equity used their homes like an ATM. Today that paradigm has shifted, and in many cases so far to the opposite extreme that people are afraid of real estate as an investment vehicle. I frequently hear people say that they “just don’t think they’ll qualify for a loan” or that “home ownership is no longer the American dream”. We have to go back to viewing real estate as a valuable, long term, wealth building asset.

Having real estate in your investment portfolio still makes great sense, says Carole. Historic low interest rates today make real estate an incredible investment opportunity. Inflation is sure to come and mortgage interest rates will rise. The prevailing opinion among most experts (including Carole Rodoni) is that rates will begin to rise in the third quarter of 2011. Among Carole’s other predictions is that short sales will remain a significant percentage of overall sales over the next few years. She also offered little hope that banks will show any significant improvement in their handling of short sales and foreclosures.

There are several You Tube videos featuring Carole Rodoni if you’d like more information about her and her perspective on real estate. She’s a fascinating lady. You can also check out her website at www.bambooconsultinginc.com. Of course those of us who work in the real estate industry are often accused of wearing rose-colored glasses when it comes to our profession. However this cannot refute the fact that today there are twice as many homes in escrow than there were at this same time two years ago. It’s not all just a matter of perspective!

October 10, 2010

WHAT’S HAPPENING IN THE LOCAL REAL ESTATE MARKET?
While not as strong as they were last year, the MARS* numbers are still averaging 107 for the first nine months of this year; exactly the same as last year. Here are the numbers for this past September:
MARKET AREA MARS*
South County: 111

North County: 100

North Coast: 91

County Average: 117

These numbers indicate that demand for homes is stronger than the growing supply of new inventory, which is a positive phenomenon. When the MARS* is over one hundred (which it has been for 10 out of the last 12 months, we would expect to see the total inventory of homes for sale decrease. In fact we’re seeing exactly the opposite. Our current inventory of homes for sale in the county (1,672) is approximately 7% higher than September of 2009 (1,557).

The question is: Why is our inventory higher when demand is supposed to be out-pacing supply? The answer lies in a 60 day slump in sales, combined with a spike in new listing activity, back in May and June of this year. Those two months for some reason were very sluggish in terms of sales, and this allowed our inventory of homes for sale to rise to an all-time high for the year (1,722 homes). Even though sales over the past three months have increased. We are seeing the inventory decrease now however, which is what we’d expect.

Many people have asked me about the recent announcement by Bank of America that they are putting a hold on foreclosures until investigations can determine that they are following the proper procedures in the foreclosure process. B of A’s actions are not surprising to me at all. After last year’s acquisition of Countrywide, B of A now has approximately 35% of all the mortgages in the country. This means they also have the lion’s share of mortgages in default.

I’m hoping, and I suspect this latest decision will lead B of A to focus on alternatives to foreclosure. This would be in everyone’s best interest. The short sale process is a far better alternative in an economic sense, for buyers, and for property owners who are in distress. If banks can find a way to streamline this process it would have enormous positive, far reaching impacts.

On a lighter note: Did you know that a 2008 Gallup-Healthways poll the residents of the City of San Luis Obispo was ranked #1 in the entire U.S. in overall emotional health. I don’t know how they judge that, but I know I’m always very grateful for being able to live here. Best selling author Dan Buettner is coming out with a new book, “Thrive”, on October 19 in which he allegedly makes several references to our county as being one of “the happiest spots on Earth”!

Happy Autumn everyone!

For more details on market activity please visit www.RandySteiger.com; and please feel free to contact me if you have questions or suggestions for topics you’d like to see covered in this column. I am grateful for this opportunity to be a resource for real estate information in our community!

*The MARS index (Market Activity Ratio Statistic) is obtained by dividing the number of new escrows opened in a given period of time by the number of new listings in that same period of time, then multiplied by 100. The number is basically the percentage of new listings that are being offset by new escrows. The higher the MARS, the hotter the market. Please call me if you have any questions on this.

September 7, 2010

WHAT’S HAPPENING WITH THE LOCAL REAL ESTATE MARKET?

Although the MARS* numbers are lower than last year at this same time, we’re still experiencing some good numbers. Here are the MARS* numbers for the end of August:

MARKET AREA            MARS*
San Luis Obispo:          113
South County:              84
North County:             168
North Coast:              124

County Average:           118

There are a few indicators that prove our market is not as strong as it was last year. The most important is a rise in our total inventory of homes for sale in the county, which is currently at 1,701 compared to 1,582 last year. While this is only about 8% higher than last year, it is a trend that could cause a continuing decrease in real estate values. It’s also interesting that, with the exception of the North Coast market area, the inventory has increased fairly evenly throughout the county. The North Coast market area is basically the same as it was last year.

Another indicator of a slowdown in the market is the number of homes currently in escrow. At this time we have 530 properties in escrow in the county, compared to 582 (or approximately 10% less) last year at this same time. Nearly all of this decrease has taken place in the North County market area, which suggests a lower demand for real estate in the North County. This market area has been one of the stronger markets in the county for the past few years, so this decline is interesting. There seems to have been a decrease in the foreclosed properties in the North County, which could account for the lower number of sales.

A few other interesting changes in the market include a slight lengthening of time homes stay on the market prior to selling, currently at 120 days compared to 97 days, on average, at the beginning of this year. Along with that we’re seeing a 37% increase in the number of price reductions for existing listings this past August compared to August 2009. This indicates that sellers are having to be more aggressive in getting their homes sold these days.

Even with a higher inventory and fewer homes in escrow, this year is still stronger in terms of sales than last year. And despite the trend of decreasing sales, we are still seeing strong MARS* numbers (over 100) which indicate a strong demand overall. With 30-year mortgage interest rates now below 4.5%, it’s a great time to invest!

For more details on market activity please visit www.RandySteiger.com; and please feel free to contact me if you have questions or suggestions for topics you’d like to see covered in this column. I am grateful for this opportunity to be a resource for real estate information in our community!

*The MARS index (Market Activity Ratio Statistic) is obtained by dividing the number of new escrows opened in a given period of time by the number of new listings in that same period of time, then multiplied by 100. The number is basically the percentage of new listings that are being offset by new escrows. The higher the MARS, the hotter the market. Please call me if you have any questions on this.

 

August 23, 2010

WHAT’S HAPPENING WITH THE LOCAL REAL ESTATE MARKET?The final Numbers are in for the first half of 2010, and they are positive. Here are the numbers for the first six months of this year, and for the same period in 2009 for comparison:
CATEGORY                      2010                   2009                  VARIANCE           % CHANGE

NEW LISTINGS 2,568                    2,164                        +404                              +19%

NEW ESCROWS 2,635                    2,211                         +424                              +19%

TTL PENDINGS 1,703                    1,823                         -120                                 – 7%

TTL INVENTORY 549                       359                         +190                              +52%

MARS*                                       103                       102

The MARS* numbers show a remarkable consistency in the ratio of new listings to new escrows opened during the same period between 2009 and 1010. This is really interesting in that the balance between the number of sellers and the number of buyers has remained virtually the same in the first half of both 2009 and 2010.

Another really interesting phenomenon is the 19% increase for both new listings and new escrows opened in 2010 over 2009. Even with this increase, our total inventory is lower this year than it was last year. This is due to the remarkable increase in the total number of homes currently pending (in escrow) at the end of June 2010. There were 52% more homes in escrow than at the same time in 2009. This absolutely reflects a higher demand for real estate.

The large increase in the number of homes in escrow, in my opinion, is in large part due to government tax incentives. Other contributing factors would be historic low interest rates and low real estate prices. We may expect to see a decrease in sales in the second half of the year as a result of the government incentives being eliminated.

The total inventory of homes for sale in the county has dropped 7% this year, so far, over last year. This is the fourth year in a row we’ve seen a decrease in inventory for this time of year, however the differential is smaller this year. This suggests we may see a leveling off of our county inventory over the next few years.

Another exciting change is the number of days homes stay on the market prior to selling. Last year at the end of the second half of the year homes were staying on the market for nearly 5 months (151 days). At the same time this year we are seeing homes stay on the market for a little over 3.5 months (111 days). This reflects aggressive pricing by sellers, as well as the pricing structure for both foreclosures and short sales.

In my opinion we still have reason for optimism that our local real estate market will continue to show good recovery. We’re not seeing real dramatic changes in value as we have over previous years. While there is no indication that prices are beginning to go up, they don’t seem to be continuing to fall as they have been in recent years. All things considered, we’re in a pretty “healthy” market.

For more details on market activity please visit www.RandySteiger.com

*The MARS index (Market Activity Ratio Statistic) is obtained by dividing the number of new escrows opened in a given period of time by the number of new listings in that same period of time. It can also be viewed as the percentage of new listings that are being offset by new escrows. The higher the MARS, the hotter the market. Please call me if you have any questions on this.

July 1, 2010

WHAT’S HAPPENING WITH THE LOCAL REAL ESTATE MARKET?
The second quarter of 2010 showed weaker MARS* numbers than we saw in the previous 12 months, but the numbers are still relatively strong overall. Here are the numbers for the last week of June, 2010:
MARKET AREA MARS*
San Luis Obispo 55
South County 80
North County 85
North Coast 100
County Average 82
The MARS* total for the county, on average, came in at 100 for the second quarter of this year. While we’ve been seeing MARS* numbers well over 100 for the past 12 months, this lower number for the second quarter has significant meaning.
First of all let’s take a look at the number of new listings coming on the market for the second quarter of 2010 versus 2009. Last year we had a total of 1,080 new listings come on the market during the second quarter. This year, there were 1,209 new listings during the same period. This is an increase of approximately 11 percent.
Secondly, the number of new escrows opened during the second quarter of 2009 was higher than in 2010. In 2009 there were a total of 1,265 new escrows opened during the second quarter, compared to 1,212 in 2010. This is a decrease of approximately 4 percent.
The substantial rise of new listings coming on the market during the second quarter of this year is most likely the result of a few different factors. The government tax incentives applied to move-up buyers can be partly responsible, and the increase in foreclosure and short-sale listings is another.
It’s also interesting to note that the decrease in the number of new escrows opened occurred between May and June; when the federal tax incentive expired. The total number of new escrows opened dropped 12% between May and June of this year, accounting for the lion’s share of our decrease in new sales.
This is not necessarily unusual for this time of year, and a few positive indicators for the market still remain. Currently there are 549 homes in escrow in our county. Last year at this time there were 359! That is about 60% higher than last year! Also, our total inventory of homes for sale remains low. Currently there are 1,703 homes on the market. This is the lowest number of homes for sale in our county, for this period of time, in the past six years.
So what does all this mean? In my opinion the numbers clearly show that the government tax incentives, both federal and state, have had a powerful impact on our real estate market, along with historically low mortgage interest rates. Also, the fluctuations in the market are not what I would call “drastic”, which to me suggests we have a healthy balance between buyers and sellers in our county. It is still a great time to buy real estate, and not such a bad time to sell either.
*The MARS index (Market Activity Ratio Statistic) is obtained by dividing the number of new escrows opened in a given period of time by the number of new listings in that same period of time, then multiplied by 100. The number is basically the percentage of new listings that are being offset by new escrows. The higher the MARS, the hotter the market. Please call me if you have any questions on this.

May 17, 2010

WHAT’S HAPPENING WITH THE LOCAL REAL ESTATE MARKET?

Half way into the second quarter of 2010 our real estate market continues to show signs of strength. Here are the MARS* numbers for the last week of April:

San Luis Obispo: 200

South County: 129

North County: 162

North Coast: 113

County Average: 147

Notice that in the San Luis Obispo market area there were twice as many new escrows opened in this week as there were new listings that came on the market. All of the market areas in this study showed stronger activity in the number of new escrows opened compared with new listings coming on the market. The county average of 147 is the highest recorded MARS* index since I began recording this data in January of 2006; and indicates strong consumer demand for real estate in our county.

We have averaged a MARS* of over 100 in ten of the past twelve months in San Luis Obispo County! The two months with exceptions were last July when we saw a MARS* of 90, and in March of this year it was 94. Note that even the lowest months of the past year still gave us a MARS* index of 90 or higher. This is significant. I am now in the fifth year of tracking these numbers and the past year has by far been the strongest when we compare demand versus supply.

Because of the high MARS* numbers we continue to see our inventory of homes for sale stay comparatively low. We currently have 1,587 homes for sale in the county. This is the lowest of any other April in the past five years. Normally this is the time of year when our inventory increases dramatically. However we have only seen an increase of approximately 18% since the beginning of the year. In previous years we have seen growth in inventory of 30% in the first half of the year.

Another interesting fact about our market today is the high number of homes currently in escrow: 643. To give you a perspective, there were 384 homes in escrow at the end of April 2009. And before many of you write back to tell me, I do know that all of these escrows do not close. But keep in mind that some of those 384 in escrow last year probably didn’t close either. Also, I do not mention the number of closed escrows here because there are many other people doing that. Suffice to say that sales are up nearly 70 percent over last year.

The majority of sales continue to be in the lower price ranges, with many first time home buyers entering the market. With strong government tax incentives and low interest rates, combined with affordable prices, buying a home is now more sensible than renting one for many people. Prices are continuing to stabilized in these lower price ranges in many communities throughout the county, and the higher price properties are still experiencing a “softening” of value. It’s still a great time to invest!

For more details on market activity please visit www.RandySteiger.com

*The MARS index (Market Activity Ratio Statistic) is obtained by dividing the number of new escrows opened in a given period of time by the number of new listings in that same period of time, then multiplied by 100. The number is basically the percentage of new listings that are being offset by new escrows. The higher the MARS, the hotter the market. Please call me if you have any questions on this.

April 19, 2010

WHAT’S HAPPENING WITH THE LOCAL REAL ESTATE MARKET?

March 2010 saw the end of a seven-month streak with MARS* averaging over 100. Still the average MARS* for March was 94. With only two of the last twelve months having a MARS* of under 100, the average for the past twelve months is 111. Here are the numbers for mid April:
San Luis Obispo: 53
South County: 85
North County: 115
North Coast: 107
County Average: 92
It’s not unusual to expect the MARS* to decline in the spring, since this is the time of year when more houses come on the market for sale. In fact our county-wide inventory of homes for sale has risen in April to 1,561; a 5% increase over the end of March (1,486). Even though inventory is on the rise, we are still 12% below where we were last year at this same time.  In looking at our county real estate statistics over the last three years there are some interesting facts revealed. Our county-wide inventory of homes for sale at the end of March 2007 was 2,197.
The end of March 2010 (1,486) is 29% lower. This is a significant change. Another interesting trend is the number of days, on average, it takes for a home to sell in our county. In March of 2007 homes were on the market for an average of 119 days. Today the average time for a home to sell is 104 days.
Some interesting statistics also popped up when I was looking at a comparison of homes sold in 2009 over 2007: Sales of residential listings increased by 14% over this time. This of course goes hand-in-hand with the strong MARS* numbers for the past year and the reduction of inventory. Now here’s the bad news: The median home price (the point at which half of all homes sold for less and half sold for more) dropped from $626,916 in 2007 to $444,505 in 2009 (or 30%).
Keep in mind this doesn’t necessarily mean that your home has dropped 30% in value over the past few years. This drop is indicative of the fact that the majority of people buying homes lately is made up of first-time buyers and investors. Both of these categories of buyers target the lower priced homes, which I think accounts for a large share of the median price drop.
For those of you who have become familiar with this column you know I always like to end on a positive note. So here’s one more statistic that is really amazing: At the end of March, 2009 there were 304 homes in escrow. At the end of March of this year there were 604 homes in escrow; almost double over last year. Clearly demand for real estate is higher than it’s been in the past several years!
For more details on market activity please visit www.RandySteiger.com; and please feel free to contact me if you have questions or suggestions for topics you’d like to see covered in this column. I am grateful for this opportunity to be a resource for real estate information in our community!
*The MARS index (Market Activity Ratio Statistic) is obtained by dividing the number of new escrows opened in a given period of time by the number of new listings in that same period of time, then multiplied by 100. The number is basically the percentage of new listings that are being offset by new escrows. The higher the MARS, the hotter the market. Please call me if you have any questions on this.

April 5, 2010

HOME BUYING INCENTIVES WITH A SHELF LIFE

For a limited time California first time home buyers can take advantage of up to $18,000 in combined state and federal tax credits if they enter into contract to buy a home after May 1, 2010 and close escrow before June 30, 1010. Other home purchasers may qualify for up to $16,500 if they meet certain requirements, such as having lived in the home they’re replacing for at least 5 of the last eight years and the replacement home has never been previously occupied. Like any other government program, these incentives are not always simple and easy for some people to navigate.

Let’s first take a look at the existing federal tax incentive program. This program is designed to give first time home buyers up to $8000 in tax credit or rebate if they enter into an escrow to purchase before May 1, 2010 and close that purchase prior to June 30, 2010. The actual credit/rebate will be calculated at 10% of the sale price of the home for homes valued under $800,000. There are extensions of the time frames for certain military personnel who are out of the country on active duty.

Home buyers taking advantage of the federal tax program must also keep their homes for at least 36 months after closing or they might be required to give a pro-rated portion of their credit/rebate back to the government. Furthermore, there are income restrictions: Single taxpayers must have a modified adjusted gross income (MAGI) of $125,000 or less, and married taxpayers must have a MAGI up to $225,000. Single taxpayers with income between $125,000 and $145,000 and married taxpayers with income between $225,000 and $245,000 are eligible for a reduced credit.

Now take a look at the California State Franchise Tax Board credit/rebate: Governor Schwarzenegger signed into law in March a tax incentive program for home buyers giving them up to a total of $10,000 in rebates/credits. IF they meet certain criteria, of course. The incentive is available to first-time home buyers OR purchasers of homes that have never before been occupied. A total of $200 million has allocated for this program with half dedicated to first-time home buyers and half dedicated to buyers of new homes.

The California tax incentive is given over the course of three years in equal amounts of $3,333. Buyers must be at least 18 years of age and be unrelated to the seller of the property. Buyers must also live in the home they’re purchasing to be eligible. As with the federal program, first time home buyers are defined as those who have not owned a home for three years prior to closing escrow. This law is different from previous California legislation in that it allows buyers of new homes currently under construction to reserve a tax credit in advance as long as the property is completed before the end of the year.

So as good as all this sounds please be aware that there is a great deal of “fine print” to decipher before rushing into an assumption that you’re eligible for any tax credit or rebate. Do your homework and consult tax, legal, and real estate professionals. Not only are there great mortgage programs available, but the low home prices also offer two more reasons to get into the market sooner rather than later!

March 1, 2010

WHAT’S HAPPENING WITH THE LOCAL REAL ESTATE MARKET?

The first quarter of 2010 is continuing to indicate positive expectations for our local real estate market. The MARS* numbers for month of February are as follows:

San Luis Obispo: 59

South County: 123

North County: 139

North Coast: 106

County Average: 111

Seeing the average MARS* remain above 100 is indeed encouraging as a sign that demand continues to be strong in this market. The San Luis Obispo market area continues to be the weakest of the four market areas in our study. There are many reasons for this, but the primary ones are the relatively stable level of inventory in this area and the historically high cost of housing compared to the other market areas. We have seen values decline substantially in San Luis Obispo, however consumers can still find better values in other parts of the county.

The South County market area has consistently shown strong market activity over the past six months. This is due primarily to the large number of foreclosure and short sale properties that have come on the market. Furthermore, there is an abundance of affordable, newer construction homes available in the South County. The inventory in the South County market area has begun to increase again after more than two years of steady decline. This will most likely continue to have downward pressure on values in this market area.

The North County market area has typically been the strongest segment of our county in terms of market activity over the past few years. We have seen the inventory of homes for sale in the North County go from a high of nearly 900 homes in 2008 to a current low of 470 (nearly 50% less). This reduction in inventory has been critical to the North County communities in terms of beginning to stabilize property values there. We are finally starting to see homes in the entry-level price ranges holding steady for the first time in four years.

The North Coast market area (from Los Osos to San Simeon) has been one of the most interesting market areas in the county to watch recently. The current inventory of homes for sale in the North Coast market area is down to 280 homes, from a high of 387 homes at this same time two years ago. While this is only an approximate 30% drop, it has had a profound impact on the market. The coast remains a very desirable place to live and the cost of homes in these communities has become much more affordable.

Overall inventory in the county is currently at 1,373 homes. This is significantly lower than at the same time in any of the previous 4 years. Furthermore, the inventory is not fluctuating as dramatically, month to month, as it has in past years. This indicates that only serious sellers are coming on the market.

As indicated by the strong MARS* numbers, we are experiencing a greater demand for housing than the number of homes coming on the market. Low interest rates, attractive home bargains, and government tax incentives are all playing a role in supporting this high demand. We are still seeing prices decrease, overall, and while there is no end in sight for this, all indications are very positive that we will continue to see positive signs of recovery in our market throughout 2010.

For more details on market activity please visit www.RandySteiger.com; and please feel free to contact me if you have questions or suggestions for topics you’d like to see covered in this column. I am grateful for this opportunity to be a resource for real estate information in our community!

*The MARS index (Market Activity Ratio Statistic) is obtained by dividing the number of new escrows opened in a given period of time by the number of new listings in that same period of time, then multiplied by 100. The number is basically the percentage of new listings that are being offset by new escrows. The higher the MARS, the hotter the market. Please call me if you have any questions on this.

February 01, 2010

HOW’S THE REAL ESTATE MARKET LOOKING SO FAR THIS YEAR?

The MARS* numbers for the month of January indicate that we’re off to a good year!

San Luis Obispo:     68

South County:        111

North County:        104

North Coast:          150

County Average:    108

In looking back over the last 4 years at January’s MARS* numbers I found that this is the first time they’ve come in over 100.  Clearly we are entering the new year with the same strength of market statistics that we consistently saw during the last 9 months of 2009.  Here is a look at January’s numbers over past years:

Year            New Listings      New Sales       Mars
2006                 282                    151             54
2007                 445                     368            83
2008                 411                     240            58
2009                 397                     343            86
2010                 417                     449           108

What is significant about these numbers is that January is typically considered to be a slow month for real estate sales.  Additionally, January is when we begin to see the inventory increasing as people who took their listings off the market for the holidays start to put them back on the market afterward.  What these most recent numbers indicate is that the number of new listings coming on the market is relatively stable over the past 4 years, while sales are dramatically higher.  So much for the “slow January” theory.

As I’ve mentioned recently in this column: we are seeing a stabilization of prices in the lower end of the market.  These sales numbers reflect mostly homes priced in the “entry level” price category in the various market areas of the county.  This is obviously a good sign, and the expectation is that we will see this stabilization begin to expand into the “middle level” price categories as well.  This would be a natural indicator that our market is continuing to recover nicely.

The average number of days homes are staying on the market prior to selling was 97 for this past January.  This number has been decreasing steadily since 2007, when we saw a high of 166 days on the market (on the average).  I believe this is a result of more realistic expectations on behalf of sellers and aggressive pricing of short sales and foreclosures.  There seems to be a “healthy” population of qualified buyers out there who are ready to buy and eager to snap up a deal.

*The MARS index (Market Activity Ratio Statistic) is obtained by dividing the number of new escrows opened in a given period of time by the number of new listings in that same period of time, then multiplied by 100.  The number is basically the percentage of new listings that are being offset by new escrows.  The higher the MARS, the hotter the market.  Please call me if you have any questions on this.

Randy Steiger is the Broker/Owner of Re/Max Del Oro; serving all of San Luis Obispo County.  He can be reached at 748-1624.

San Luis Obispo: 220