May 2023 Real Estate News

{original post 5/31/2023}

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 dig deep into current interest rates, FHA drops MIP, rising credit card debt, the latest market data, appraiser approved home value adds, Dream Makers updates, and upcoming events on the Central Coast!

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! 

Exciting Partnership with Dream Makers
We are so excited to share our partnership with Dream Makers, an incredible non-profit organization that helps bring light and joy to terminally ill adults who have a life expectancy of a year or less by making their dreams come true. Because we believe in this organization and its mission so much, we have committed to donating 2.5% of every transaction to Dream Makers. 100% of every donation goes straight to making dreams come true. Please join us in supporting this amazing local non-profit.



Current Interest Rates 
After 10 consecutive rate hikes the Federal Reserve finally says that they are open to a pause. Could this finally be the end we have been waiting for? With rates floating in the mid 6s to 7s, we sure hope so! Hiking the rates has been an effective tool to combat inflation, and we are seeing inflation trend back down. With this in mind, experts are hoping that rates stabilize over the next few months and into 2024.

For years we were telling everyone to buy and invest in real estate while rates were low. The incredibly low rates we experienced in real estate are not normal. They were completely artificial and created by the government to spur on economic development. Several people are saying they are going to wait till rates drop before buying real estate. Well the real question is what will people wait for rates to drop to before making a move? If you look at the chart below you can see that rates have dropped off the high in the 7s and have been trending back down. If we are lucky, we may see rates dip back into the 5.5% range in the next few months, but at that point prices will most likely have resumed to a normal pace. This leads to the point that the best time to buy real estate was 20 years ago. The second best time is today. Don’t delay your opportunity to start building wealth through real estate. Create a game plan, revise your search criteria, and look for the opportunity that awaits you. There are deals in every market!

The

Federal Housing Administration Drops MIP!
Great news for buyers! The Federal Housing Administration (FHA) has dropped the rate of mortgage insurance premiums (MIPs). The cost of MIP is a percentage of your loan balance. The FHA is lowering MIP by 30 basis points (BPS) which is a reduction of 0.3% of your loan balance. That means, if you were paying 0.8% - 0.85% of your loan balance (the most common MIP cost), you’ll now pay 0.5% - 0.55% instead. A borrower with a $467,700 home – the national median home price in December 2022 – would save more than $1,400 in year one, according to the HUD press release. For this reason, FHA and VA mortgages make up 20% of all loans originated in the US right now. We are blessed to live in a country where our government is committed to helping people get into homeownership by offering these low down type programs!

US Credit Card Debt Rises to ~$1 Trillion
The amount of debt on credit cards rose to $986 Billion at the end of Q1 of 2023. This is an increase of $216B since Q1 of 2021. As you can see, Americans have been out enjoying themselves and putting things on credit. We have to caution against this as the economy is so volatile. Unemployment is low right now, but as interest rates rise it affects more than just the cost for a mortgage. The cost of materials, labor, and financing are also all affected. We may see unemployment tick up as companies have to cut costs. With this in mind, paying down credit cards is a great way to free up your monthly cash flow. Interest rates for credit cards hover around 20%, and those payments can definitely add up. We’d encourage you to tackle any outstanding debts you have on credit cards or adjustable rate loans. It will provide you greater comfort and security knowing that you don’t have to worry about that extra monthly payment. If you want a free eBook on how to tackle debt and repair credit let us know and we can send you a copy!

California's Latest Market Data
As of May 6, 2023, we have seen some improvements in the California real estate market. Closed sales, pendings, and new listings have gone up since April. 



Dream Makers - Tequila Sunset at McClintocks
Dream Makers San Luis Obispo invites you to enjoy an afternoon by the ocean, tequila tasting, special surprise guests, and great prizes. Help make dreams come true for terminally ill adults in our community. Tickets for Tequila Sunsets at McClintocks are available for purchase. If you are interested in attending, please let us know. 



Appraiser Approved Home Value Adds 
Looking to add value to your home? These 3 tried and true tips have been approved by an appraiser as true value improvements.

1. Curb Appeal and Landscape - you can never change a first impression. Make your home look good from the outside! Right when someone drives up they need to say, “Wow, this house is great!” The quickest and easiest way to do this is by adding landscaping. Gorilla hair, fresh plants, sod, and trimming can go a long way!

2. Wet Room Upgrades. The rooms that are most frequently used are the kitchen and bathrooms, also known as the wet rooms. These two spaces are the places that people look at when comparing homes. How nice are the cabinets, countertops, sinks, showers, and vanities? Go the extra mile when renovating your home and think about what will have the greatest appeal to the widest amount of people. This will help you retain the value of your home.

3. Owned Solar System. To own or to lease? That is the question! And the answer is to own. That is if you want the value of the solar system to be added to an appraisal. If you are leasing the system an appraiser can add $0 in value to the property appraisal. For this reason, if you have the option to buy a home with solar that is owned or leased, go with the owned option. Every situation is different, so we can’t give one size fits all advice. You will want to run the numbers and see what makes the most sense for you and your family when looking at solar options.

To learn more about how these three tips can help add equity, click the video below. 

Upcoming Events on the Central Coast 
Paso Robles Wine Festival 
May 18-21, 2023 
Paso Robles, CA
For more information click here!

Ironman 70.3 Morro Bay
May 20, 2023 
Morro Bay, CA
For more information click here! 

Paso Robles Olive and Lavender Festival 
May 20, 2023 
Paso Robles Downtown City Park
Paso Robles, CA 
For more information click here! 

Viva La Cerveza - SLO Beer & Taco Festival 
May 27, 2023
Madonna Meadows
San Luis Obispo, CA 
For more information click here! 

Memorial Day Ceremony on the Pier
May 29, 2023 at 11:00 AM 
Pismo Beach Pier
Pismo Beach, CA 
For more information click here! 

Current Listings 
9178 Tiburon Circle - $435,000 
7275 Nonpariel Road - $560,000

Coming soon
2 bed/2.5 bath condo in SLO - $634,000

Just Sold
8663 Portola Road - $775,000
2281 Holden Avenue - $445,000
145 South Street Unit A17 - $99,000
3057 S Higuera Street #80 - $240,000

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.