Here’s a quick video of how to search homes for sale in San Luis Obispo and all over California. You can find homes for sale, condos, lots, land, and just about every real estate listing that is currently on the market and in the various MLS systems across California. The listing data is updated multiple times daily and the most accurate info available. Neither Zillow or Trulia have this much timely accurate information on their sites. If you have any questions or need any help let me know, I am always here.
Spring is in full force; the summer months are right around the corner. If you are debating moving up to your dream San Luis Obispo home, here are four great reasons to consider listing your current home and moving up to your dream home now, instead of waiting.
1. Buyer Demand is High & Inventory is Low
Recent numbers show that buyer demand is at the highest peak experienced in years, and inventory for sale is at a 4.5-month supply, which is still markedly lower than the 6 months needed for a historically normal market.
Demand in many markets is far exceeding the supply, and more properties in March sold in less than 30 days (42%) than in any month since last July.
Listing your home today can greatly increase exposure to buyers who are out in force and ready to act.
2. Prices Will Continue to Rise
CoreLogic recently released their latest Home Price Index in which they predict that national home values will appreciate by 5.3% by this time next year.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting for your current home’s value to increase before selling could price you out of your new home if you aren’t careful.
3. Mortgage Interest Rates Are Still Near Record Lows
Interest rates have remained below 4% for some time now and are substantially lower than the rate previous generations paid when getting a mortgage.
The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison projecting that rates will rise over the next 12 months.
An increase in rates will impact YOUR monthly mortgage payment. Even an increase of half a percentage point can put a dent in your family’s net worth. Whether you are moving up or buying your first home, your housing expense will be more a year from now if a mortgage is necessary to purchase your home.
4. It’s Time to Move On with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait?
Look at the actual reason you are buying and decide whether it is worth waiting. Have you always wanted to live in a certain neighborhood? Would a climate change be just what the doctor ordered? Would you like to be closer to your family?
If the right thing for you and your family is to move up to the home of your dreams this year, buying sooner rather than later could lead to substantial savings. You may even consider one of the these luxurious homes currently on the market!
The price of any item is determined by the supply of that item, and the market demand. The National Association of Realtors (NAR) recently released their latest Existing Home Sales Report which gives insight into today’s market conditions nationwide.
Inventory Levels & Demand
Sales of existing homes rose 5.1% month-over-month in March and are 1.5% higher than this time last year. Sales rose in all four major regions in March.
Total unsold housing inventory is 1.5% lower than March 2015 at a 4.5-month supply and remains well below the six months that is needed for a historically normal market.
Consumer confidence is at the highest level in over a decade. Pair that with interest rates still below 4%, programs available for down payments as low as 3%, and you have an attractive market for buyers.
Homes sold in March were on the market for an average of 47 days and 42% of properties sold in less than a month.
March marked the 49th consecutive month of year-over-year price gains as the median price of existing homes sold rose to $210,700 (up 5.7% from 2015).
So What Does This Mean?
The chart below shows the impact that inventory levels have on home prices.
NAR’s Chief Economist, Lawrence Yun gave some insight into the correlation:
“Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures.”
If you are debating putting your home on the market in 2016, now may be the time. The number of buyers ready and willing to make a purchase is at the highest level in years. Let me know if you are ready and we can get the process started.
In today’s market, where demand is outpacing supply in most cities here in San Luis Obispo and Santa Barbara counties, pricing a house is one of the biggest challenges we’ll face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best real estate agents realize that telling the homeowner the truth is more important than getting the seller to like them.
There is no “later.”
Sellers sometimes think, “If the home doesn’t sell for this price, I can always lower it later.” However, research proves that homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes.
John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered their price. His article, Listing Price, Time on Market and Ultimate Selling Price, published in Real Estate Economics revealed:
“Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price.”
Additionally, the “I’ll lower the price later” approach can paint a negative image in buyers’ minds. Each time a price reduction occurs, buyers can naturally think, “Something must be wrong with that house.” Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.” Pricing it right from the start eliminates these challenges.
Don’t build “negotiation room” into the price.
Many sellers say that they want to price their home high in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house.
Not sure about this? Think of it this way: when a buyer is looking for a home online (as they are doing more and more often), they put in their desired price range. If your seller is looking to sell their house for $400,000, but lists it at $425,000 to build in “negotiation room,” any potential buyers that search in the $350k-$400k range won’t even know your listing is available, let alone come see it!
One great way to see this is with the chart below. The higher you price your home over its market value, the less potential buyers will actually see your home when searching.
A better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the “right” to purchase your house.
Look at it this way: if you only receive one offer, you are set up in an adversarial position against the prospective buyer. If, however, you have multiple offers, you have two or more buyers fighting to please you. Which will result in a better selling situation?
The Price is Right
Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. I am here to simply and effectively explain what is happening in the your specific market and how it applies to your home. I am committed to telling you what you need to know rather than what you want to hear. This will put us in the best possible position for success in selling your home in today’s market.
Here’s pretty much everything that you need to consider and be mindful of before we put your San Luis Obispo home on the market. If you want top dollar for your property it’s crucial that we present your property in the best possible light and in the best possible condition. If you need help with referrals for contractors or any other local central coast service people let me know and I can help you with that as well.
Remember we can only make one first impression with buyers, why not make the best most attractive first impression possible?
If you are ready to get started let me know and I can guide you through this entire process, my team and I are here to help and get you to where you and family want to go.
The Santa Barbara and San Luis Obispo counties real estate markets are really heating up and buyer demand is dramatically increasing as we enter the spring season. However, one challenge to the current market is the major shortage of inventory. Below are a few comments made in the last month by industry experts.
Lawrence Yun, Chief Economist of NAR
“Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau.”
Jonathan Smoke, Chief Economist of Realtor.com
“Low inventories and tight credit will limit the gains we will see in 2016. However, given the level of pent-up demand evident in web activity and stated buyer intentions for 2016, we should see this spring materialize as the busiest season of sales since 2006.”
Rick Sharga, Ten-X’s EVP
“Inventory is too low to support much higher sales. There’s virtually no inventory available at the entry level, and single family housing starts and permits continue to languish at levels far below where they should be at this point of the recovery.”
David Crowe, Chief Economist of the National Assoc. of Home Builders
“Many sellers may not have an absolute decision as to whether to buy an existing home or a new home. So the low inventory of existing homes is locking them in place.”
“Challenges remain, with low housing supply and declining affordability being a key concern in many markets.”
If you have have been thinking of selling your central coast home my team I would love the opportunity to earn not only your trust and business but your friendship as well. We are committed to serving you and this community.
We look forward to hearing from you!
How’s the market? How many times have you asked a Realtor that question? Probably more times than you can remember, right?
As a local San Luis Obispo Realtor I get asked that question more than 50 times a week. What most people don’t realize is how broad that question is and that we, Realtors, can’t properly give you the educated answer unless you tell us more about what you mean by that. Do you mean the California state market, the regional Central Coast market, the San Luis Obispo and Santa Barbara county markets, the Pismo Beach market, or how’s the market for your specific property that you are looking to sell?
So next time you get to that place where you’re about to drop my favorite line, think to yourself what is it that you really want to know, so that I can give you what it is you really want to know. My goal is always to help you be informed, educated, and confident in your decision to buy, sell, or hold onto your current home or investment property.
If you are still curious about how the market is, here are some stats from March 2016 here in the city of San Luis Obispo for Single Family Homes.
Median Days on Market | 31 days | Down from Feb. 2016
Ave. Days on Market | 54 days | Down from Feb. 2016
Ave. Sales Price | $826,938 | Up from Feb. 2016
Median Sales Price | $707,750 | Up from Feb. 2106
Inventory | 40 New Listings | Up from Feb. 2016
THE WRAP UP
Homes sold faster and at higher prices despite there being more inventory for sale last month here in the city San Luis Obispo. All signs are pointing to a seller’s market and a highly competitive environment for buyers.
Interest rates remain at historical lows (under 4%) so if this is the right time for you and your family to look at buying a home make sure you are prepared by having your loan qualification and closing funds in place and ready to go.
For a free no obligation consultation you can call/text me at 805.776.3313 or email me at RenierADresser@me.com
If you thought about selling your house this year, now may be the time to do it. The inventory of homes for sale here in San Luis Obispo and Santa Barbara counties is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market here on the Central Coast.
Jonathan Smoke, the Chief Economist of realtor.com, in a recent article revealed that:
“Would-be buyers face a dilemma: There will be more homes on the market over each week of the next three to four months, but there will also be even more prospective buyers. We are entering the busiest season of home buying with the lowest amount of inventory in three years. To be competitive, buyers should get pre-approved for a mortgage and be ready to act quickly if they find a home that meets their needs.”
Smoke goes on to say:
“Listings are growing as they normally do this time of the year, but because demand has been growing faster than supply, homes are selling faster. So the monthly trend is the normal seasonal pattern, but the year-over-year decline is reflective of demand being stronger than supply for more than a year, which is resulting in fewer homes available and faster-moving inventory.”
In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction including the inspection, appraisal and financing contingencies.
As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas. If you are ready to move forward with selling your home let us know and we can set up a time to get you moving in the right direction.