July 2023 Real Estate News

{original post 8/30/2023}

Hello! Thanks for tuning in to this month’s newsletter. It’s our goal to bring valuable real estate content and local updates to you, so we hope you enjoy it! ☺️🏡💛

In this e-newsletter, we will share our top landscape designer recommendation, dig deep into interest rates and the true cost of inaction, discuss the current inventory, and more!

The Schwaegerle Team strives to educate and empower all people on the ins and outs of real estate, so thank you for tuning in and following the team on social media! 

July 4 – America is getting older, and so are its people

Our country turned 247 years old this month on July 4. Can you believe how time has flown? During that time we have seen incredible advancements in technology, healthcare, education, voter rights, access to land ownership, and more. One of the most astounding things is that the average life expectancy today is 70+ compared to being in the 30s like it was 200 years ago when our nation first started. Why does this matter in the real estate world? Well, everyone needs a place to live.

As advancements in technology and healthcare cause older generations to live longer, a growing segment of the population is choosing to age in place. A recent study done by the American Association of Retired Persons (AARP) found that 86% of seniors would prefer staying in their home for as long as possible, rather than downsize or move into a retirement community. They are opting for remodeling their homes to be easy to navigate as they age in place instead of moving. The growing number of at home healthcare options has also reduced the need for seniors to move into care homes. This is one of the large reasons we are seeing the inventory dip to incredibly low levels nationwide. People are simply not selling.

There are a number of ways to improve your home if you choose to stay where you are. Reach out to us if you’d like recommendations for contractors, handymen, painters, landscapers, designers, etc. We are always happy to help!

The New Deal is the Buy and Wait! 

The demographic data gives us a strong indication that demand for housing units is not going to be letting up anytime soon. Now the biggest issue we are facing is affordability. It used to be the prices we would complain about, but now it is the interest rates and the prices. We want to share a small snippet from our July 2021 newsletter. This is just to show where we got it right in the past:
 

Buyers are always looking for deals, and the deal for today’s market truly is the historically low interest rates. When else in history are we going to get rates like this? Take a look at some of the record low rates buyers are getting today: 

At that moment in history, the deal was the interest rate. We worked hard to communicate this point, and several people took advantage and bought homes then. Others said they would wait till prices came down. Yet, prices started to skyrocket. We continued to tell people that buying and holding would create massive equity for themselves and their families. And it did. Prices shot up 16% between June 2021 and June 2022. We are glad so many people listened and bought homes back then. Even though prices recently reduced about 10%, they have already recovered and are only down 1.8% year over year. Meaning the window of opportunity is shrinking. In fact, in some areas the window has closed and properties are selling in bidding wars of 3, 11, and 30+ offers. That is just a small sampling of what we are seeing right now on the open market. Now, in this tumultuous time we hear many people say they are going to wait till rates drop before they buy. This logic seems to make sense. If I wait till rates go down, I can afford more house and buy what I want. Yet, the cost of inaction is greater than you realize. 

In the graph below, you can see the breakdown of how the cost of waiting to purchase can add up. Let’s say you want to wait to purchase till rates drop from 6.875% to 5.875%. This could be 6-12 months from now. On the purchase of a $732,500 home with a 10% down payment your payment would drop $431.109/mo by waiting. This seems significant, and indeed it is. This stacks up to savings of ~$3.3K in 6 months or ~$6.9K in 12 months. However, if you factor in the loss of appreciation and loan pay down during that time period it equates to lost equity of $19K for 6 months and $36K over 12 months. Even after factoring in the savings on the monthly payment this is a financial loss of $15-31K! Yikes! This isn’t even factoring the tax savings you will get through writing off your property taxes and mortgage interest. This would result in thousands of extra dollars per year in savings on your tax return!

Make no mistake, we know buying real estate is expensive right now. However, when you look at the bigger picture you will find that not owning a home is costing you a lot more than renting is saving you. Though prices may feel high now, 30 years from now we'll all look back and say we can’t believe how cheap homes were back in the 2020s. If you are concerned with the market, rates, or prices, please talk to us. It can feel daunting and overwhelming to buy real estate. Even in the midst of all this, we are still helping several people buy and sell every month. It can be done. All you have to do is create a plan. Send us a message and we can help you create yours.

Ready to improve your curb appeal? We have the professional landscape designer for you!

Why landscape design? Is it worth the time, energy, and cost? Yes, yes, and yes! If you're like most people, you can probably walk around a neighborhood and identify the things you like and the things you don't, but you're not necessarily sure why you feel that way. Of course, we all have our own aesthetic (thankfully), and we know what looks good in our brains.

Maybe the reason you don't like a certain landscape is because although the plants are all nice, they don't complement each other? Maybe it's because the installation looks thrown together, disjointed, or just unkempt? Perhaps it's that everything is out of scale? This is the value of a good landscape design, and it's important to work with someone who not only has a keen design background, but also someone who knows how a landscape can practically come to life during the construction process.

That's why we are recommending Schmiedeberg Designs. They are a small team of talented professionals with a wide range of skills and experience. They love what they do, and they do it with passion. Let them draw your dream landscape, and connect you with the right people to make your dream a reality!

Owner Brandon Schmiedeberg is a California-based Landscape Designer with over 13 years of experience doing professional landscape design and installation. Both he and his wife Kelsey fell in love with the Central Coast while earning their Bachelor's Degrees in Landscape Architecture from Cal Poly SLO. They have produced fantastic designs for us in the past, and we are proud to recommend them to you.

Interested in learning more about the services they offer? Check out their website or reach out to Brandon directly at 858.967.6217 or via email at schmiedeberg15@gmail.com.

Summer Deals to Enjoy 

Firestone Walker Brewing Company - Paso Robles
Locals - Get 25% OFF beer, food, and merchandise every Monday

Red Soles Winery - Paso Robles
40% OFF All Wine & Spirits through August 31, 2023
Visit redsoleswinery.com for more information. 

Hella Hot 1 Year Anniversary - San Luis Obispo 
July 15, 2023 enjoy 20% OFF All Day + $1 tenders until 4 PM

Brooks Burger - Pismo Beach 
Kids eat Free every Monday 

MilkT Society - San Luis Obispo & Pismo Beach 
BOGO any drink from 1-3 PM, Monday-Friday until August 11, 2023

Current Listings 
1680 Main St #32 - $180,000
587 Yreka Dr - $535,000

Just Sold
5928 Gran Paseo Drive - $385,000
5089 Meadow Lark Lane - $515,000
72 Valley View Drive - $1,140,000
1024 Trail View Place - $1,211,265
398 Selby Street - $804,500
9178 Tiburon Circle - $415,000

Let's Be Social
Thanks so much for reading our newsletter this month! We want to hear from you! Please let us know how we can support you on your real estate journey. Whether you just purchased a new home, want to explore home-buying options, are curious about what your property might be worth, or just want to know more about the market, please reach out! 

@theschwaegerleteam
@closeinslo
@your.realtor.slo

You can also follow us on YouTube and Facebook for more updates throughout the month.
 

The Schwaegerle Team donates 2.5% of all transactions to Dream Makers. Thank you for helping make dreams come true for terminally ill adults in SLO County!