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:
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!
November 7, 2014
12th Annual Gently Used
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
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
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
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
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?
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