October 2023 Real Estate News

{original post 10/19/2023}

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 introduce the newest agent on our team, discuss housing shortage solutions, and spotlight the latest landscaping tips from Schmiedeberg Designs.

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!

New Agent Highlight: Kyle Reis  

We are pleased to welcome Kyle Reis as our newest agent to the team! Kyle grew up in Manteca, California and comes from a family of educators and coaches. He is an athlete, a former college football player, and a recent graduate from Cal Poly. An entrepreneur at heart, Kyle and his family currently own Sugar Lips Mini Donuts. Stop by and say hi next time you’re at the farmers market!

Kyle is looking forward to helping others achieve their real estate dreams here on the Central Coast. We’re grateful to have him on the team!

Are ADUs the Solution to the Housing Shortage?

We all know we are in a housing shortage. The cost to buy and rent homes in California has skyrocketed over the last several years. Are ADUs the future of more affordable housing? 

ADU stands for Accessory Dwelling Unit, which is a secondary housing unit on a single family lot. They’re commonly referred to as “granny units” or “cottages.” Between 2020 and 2023, the city of SLO issued 213 ADU permits. This is incredible! ADUs are an easy, in-fill option that can help preserve our beautiful open space and provide low cost options to homeowners and developers. 

Two of those permits in the past few years have been ours. One ADU conversion we did was a ~300 sqft game room that was converted to an ADU for about $45,000. Another was a ~400 sqft garage that was converted to an ADU for about $120,000. Both projects took more time and money than expected (doesn’t that always happen in construction?). However, these ADUs were built at a much lower rate than ground up construction would have cost. For example, new construction can cost anywhere from $350-550/sqft. That could have come out to $105-140,000 on the low end if it were ground up construction. 

California has been pioneering some new projects to get more units built at low cost. In fact, CalHFA was even giving out grants for up to $40,000 to assist low to moderate income homeowners with building ADUs on their properties. These grants could go toward soft costs like pre-development and non-recurring closing costs associated with the construction of the ADU. Those funds dried up on March 1 of this year, but they may be deploying more resources here soon. Initially, there was $100M allocated for this program, and the state is currently debating whether an additional $50M should be given in grants towards ADU construction. 

While giving out grants to cover the build out costs is a great idea, it hasn’t changed the industry enough to make ADU build outs more attainable. Why is that? First of all, it isn’t sustainable. You can only give away so much money before you run out. Of the people who want to build ADUs, most of them are held back because of the cost. Coming up with $50-150K in cash to build an ADU on your house can be a huge challenge. While someone could do a cash out refinance, or pull out a line of credit on their house to do the construction, that can be very expensive given today’s rates. 

Since it’s expensive, that puts the brakes on people’s dreams of having an in-law unit or ADU built out. Most lenders aren’t willing to finance these types of projects at this point in time because they view it as higher risk. If California wants to make a true change in the industry, they should come up with a program that helps incentivize lenders to create a financing option specifically for ADU construction. This would help lower the cost and increase access to financing for thousands of people who want to do ADU projects but cannot currently afford it.

Imagine what California would look like if everyone who wanted to build an ADU had access to the capital and was able to do it? Imagine if people were able to order prefabricated homes and drop them in their backyards, convert garages and basements, rent them out, and have that rental income cover the cost of the low, monthly payment. Imagine a world where thousands of units were created in a short period of time and relief was finally provided to the housing industry! All of that could be made possible through the addition of government-incentivized financing for the construction of ADUs.

Partner Spotlight - Schmiedeberg Designs

Hello good friends! School is back in session, the corn is almost as tall as me, and it's only a matter of time before the crisp fall breeze begins to blow the leaves off our deciduous trees. What does this mean for your landscape? It's time to start looking at your ongoing maintenance, double-checking your watering schedules, and making sure that your drains are working before any winter rains hit.

Looking around your yard and thinking "my landscape needs a refresh"? Our team at Schmiedeberg Designs can help draw your dream landscape, and connect you with the right people to make your dream a reality! In partnering with licensed landscape contractors up and down the Central Coast, no project is too big or too small, and there's still enough time to get things done before the holidays!

Keeping up with the latest landscape trends can be overwhelming. Your Pinterest page probably has a million images of different landscape elements (and cool fall food ideas), and your space may not be big enough to capture everything you need. That's why you should call on a professional designer to help create the landscape you want in a functional and aesthetically pleasing way (including a space to enjoy one of those "40 healthy fall recipes under 500 calories" that you pinned).

The team at Schmiedeberg Designs is here to create comfortable outdoor living spaces at your home, while boosting curb appeal and property value. Reach out to Brandon directly at 858.967.6217 or via email at schmiedeberg15@gmail.com.

Active Listings 
1076 Santa Maria Ave, Los Osos - $995,000
3591 Sacramento Dr #56, San Luis Obispo - $765,000
13190 Cambria Rd, Santa Margarita - $190,000
1680 Main St #32, Morro Bay - $180,000

Just Sold
3083 Rockview Pl, San Luis Obispo - $1,150,000
2524 Augusta St, San Luis Obispo - $859,000
842 Alyssum Ct #15, San Luis Obispo - $819,500
1906 Ybarra Ave, Santa Maria - $689,000
1454 Pineridge Dr, Cambria -  $665,000
1155 Bailey Dr, Paso Robles - $400,555
2700 Cienaga St #26, Oceano - $335,000

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
@kylereis70

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!