March 2022 Real Estate News

{original post 3/22/2022}

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! 


In this e-newsletter, we will provide you with the latest news of what's been happening with the team, explain the latest research on soaring housing prices, and invite you to journey with us throughout the day on social media! 

The Schwaegerle Team strives to educate and empower all people on the ins and outs of real estate, so please follow each team member on Instagram and/or Facebook to get more frequent updates!

New Team Updates
We are so happy to welcome the newest agent to our team, Maria Nova! Maria has over six years of real estate experience in Vermont and recently relocated to California. She is an expert on the market in North County and is ready to help make so many people's dreams come true this year! Maria has a darling son named Kai, who you will probably meet out and about on appointments. He is the best Open House greeter! Please join us in welcoming Maria to the team. It's an honor to partner with her! 

We are also working on improving our business database. We have been going through and updating all of the old contact information. If you want us to keep you posted with our monthly mail, please share your best mailing address with us.

Finally, we just found out that Baby Schwaegerle is a BOY! Camille and Owen had a small gender reveal party with a balloon drop. Here's a picture of the whole team with blue balloons! 
Pictured left to right: Owen, Camille, Savannah, Kai, and Maria.

What is going on with the housing supply?
What is going on with the supply of homes on the market? Why is it so low and why are prices climbing steadily? Take a look at the graph below showing the construction of new single family housing over the last 5 decades. You can see that the number of homes being built over the past 13 years is below the 50 year average. Obviously, this poses a really big challenge for anyone who is a first time homebuyer or is coming into the market with no equity to work with.When it comes to housing, we have to ask, is it getting more affordable or more expensive to build homes? Let’s take a look at the cost of lumber from 2020 to 2021. In May of 2020, $50,000 worth of lumber could build approximately 10 homes. In May of 2021, that $50,000 of lumber could build a little over 2 homes. Yikes! Lumber was trading at $1452 per 1000 board feet as of Mar 4, 2022. Lumber is just one of the many supplies that goes into building a home. You also have drywall, flooring, insulation, roofing, and other costs to consider while building a home, and several of these materials have also gone up.
Not only is the cost of materials going up, but so is the cost of labor. Due to inflation, the cost of living has increased, so labor costs have significantly risen. Contractors have also been slammed lately with all of the renovations people are doing on their homes, so they are harder to book for your own projects.Overall, the cost of new construction homes is currently increasing so dramatically that this just amplifies our housing supply shortage and drives home prices up even further.
This graph shows how low the active listings in the USA have actually been. In SLO County the number of homes on the market right now is only 339.

What about the housing demand?
We all have heard about the supply lately. Everyone is saying supply is low, which is true for active listings, but the total number of homes sold is actually up. In 2021 there were 6.12 million homes sold compared to 5.64 million in 2020 and 5.34 million in 2019. This is the highest number of homes to have sold since 2006. Buyers are so eager to purchase a home that the average time it takes to go under contract for SLO County is only 9 days! The demand for housing is extremely high, and because of that, values are rising. Due to the volatility of the markets, people are looking for a secure investment. Inflation just hit 7.5% as of January 2022, which is the highest it has been since June 1982. For these reasons, people are looking to invest in real estate as a hedge against inflation. Another beautiful thing about owning real estate is you can get a fixed rate mortgage, which is better than having rent continually rise each year. In fact, in some places in the country rents are rising faster than home values. The inflation rate is pushing more people to invest in real estate, which is causing a surge of capital to flood into this asset class. This trend is likely to continue to push property prices higher.

This graphic below demonstrates yet another reason why homebuyer demand is at an all-time high. If you compare the credit rates of today’s buyers to the buyers of 2005-08, you will see that the today’s buyers have much better credit scores. Never before have U.S. credit scores been higher than they are now, which has enabled a larger percentage of the population to both afford higher-priced homes and buy more investment properties as well. With housing supply at historic lows and buyer demand poised to acquire more real estate, a perfect storm has been created that continues to push home prices higher for the foreseeable future.
Recent Reviews
Thank you so much to everyone who has taken the time to write reviews! Here are a few recent highlights for each agent:

"Camille and Owen make an excellent team. They assisted my brother and I on the purchase of our first home. They made themselves available and scheduled showings for us within a day if not that very day. They kept us informed along the whole process and gave us great advice when submitting offers. They negotiated a seller credit for us in a time when this is unheard of during this time. We highly recommend anyone looking for an agent to give them a call."    - A.D., Google

"My experience of working with Savannah has been nothing less than wonderful!! She is the type of person to go above and beyond for each of her clients. Her passion is evident, which shows in her commitment and effort she puts into each client. She also continuously educates herself on the local market, so that she is able to share relevant information to her clients and better assist them in decision-making. I 100% recommend Savannah for real estate needs!" - M.D., Google

"Maria is by far the best realtor we have ever experienced. She was able to answer all of our questions thoroughly. If we liked a home, she would immediately call the agent and ask when was the soonest we could get a tour of the home. Everything she did for us was done quickly and efficiently. She made us feel so comfortable and was so easy to talk to. She is very knowledgeable about real estate and how everything works. You can feel confident and secure using her as your realtor. We would 100% use Maria again, and we highly recommend her!" - B.P., Zillow

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
@savannahsiador_
@marianovahomes

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