San Luis Obispo Ca Real Estate

Now through June 2007 may be prime time to buy home on the Central Coast

For people thinking about buying a home on the Central Coast, now through March may offer the best opportunity of the year for favorable mortgage rates and home prices.The 2007 mortgage industry forecast by the California Association of Mortgage Brokers projects interest rates will stay within 1 percent of the current low levels through the year.That, coupled with traditionally low demand for homes during the winter months and prices that have fallen or leveled off, could mean buyers are likely to find the best deals now, according to the association.Results from the association’s fifth annual survey show 36 percent of the members believe interest rates will rise by less than 1 percent, while 29 percent believe they’ll stay the same and 26 percent say they’ll fall by less than 1 point.If mortgage brokers’ predictions are true, rates will remain below 7 percent through the year on those loans.Of those surveyed - about 10 percent of the association’s 4,000 members - 35 percent say January through March will be the best time of the year to purchase a home, although 31 percent believe April through June will be the best time.That’s because there are typically fewer buyers, more houses are on the market and sellers are more motivated. In addition, the meteoric rise in home prices has leveled off.
In the survey, 38 percent of the members said home prices will decrease less than 5 percent this year in California, while 26 percent believe there will be an increase of up to 5 percent.I think prices have stabilized and they will hold until the busiest time, spring toward summer.
Thirty-six percent of those surveyed believe the interest-only loan will be the most viable for consumers because of continued high housing costs in the state.But 29 percent of association members believe the prime fixed-rate loan will be the most popular in 2007, primarily due to refinancing by recent buyers who are seeking to capitalize on recent appreciation and escape alternative loans.
The interest rates seem pretty stable right now, and I don’t see any economic factors that are likely to change that.
Average interest rate for a 30-year, fixed-rate mortgage is hovering around 6 percent, depending upon an individual’s credit ratings and other factors.

San Luis Obispo County January 2007 Housing Market update

Those looking to buy a house in San Luis Obispo County in 2007 are expected to have a lot to choose from, while those trying to sell may have to lower their prices to stay competitive.The softening housing market of 2006 is expected to continue into 2007, real estate experts say, though it’s unknown just how drastic or long-lasting the slowdown might be. Some economists predict housing prices will rise again next year.

An economic forecast created for the county by UCSB economist Bill Watkins projects the median home price for 2007 to be $597,200, up from $585,000 in 2006. The 2008 median price is expected to rise to $626,700.

The significant thing to look for in 2007 is going to be to watch inventories, If there are low inventories, then a little flutter of activity could spin the whole thing up again.In 2006, homes took longer to sell than in previous years, leading to a large number of homes on the market. In San Luis Obispo County, 216 homes sold in November A A- a drop of 38 percent from the previous year when 351 homes sold, according to real estate research firm DataQuick. In October, 244 homes sold. From Jan. 1 to Dec. 27 of this year, 2,859 homes sold on the multiple listing service.Unlike DataQuick numbers, that figure does not include homes sold by the owner or tract homes that did not use a real estate agent.During the same time in 2005, 3,809 homes were sold. That’s a 25 percent decline in home sales.

The high inventory may have led to the median home price A A- the statistical point where half the homes sold for more and half sold for less A A- dropping for the first time in eight years. September marked the first time it had dropped since December 1998. It decreased again in October and November.

The median home price in November, the latest month for which data is available, was $512,000, according to DataQuick. That’s a decline of 8.4 percent from November 2005 and down from October’s median price of $545,000.

With more homes on the market, those who need to sell their home fast because of a new job, divorce or other need may have to lower their price.Buyers should be able to negotiate a little harder to what they think is a good price,Sellers can expect a lot of competition. Put it on the market … at a good price, not a pie-in-the-sky price.

That’s not to say prices are expected to drop drastically. I don’t think we’re going to see huge price reductions, It’s sort of a nontraditional marketMany of the people buying in the county are bringing equity earned in other parts of the state and are able to make huge down payments and afford higher-priced homes. The slowdown in 2006 was a normal one that’s expected to turn around again.Generally, 2006 was not a banner year,But if you go back and look at the last 10 years, it wasn’t that bad.

Lending forcast for the first week of 2007

In terms of economic news, the week ahead will be fairly slow, until Friday’s potentially high impact Retail Sales Report. And whenever the market lacks economic reports and data to trade on, technical indicators like historic highs, lows and trendlines will generally take center stage.And the technicals are on our side, in terms of seeing Bond pricing and home loan rates stabilizing, and perhaps even seeing more improvement in the coming days. Take a look at the chart below,(Click here to see file)Fannie Mae.pdf,which shows how Bonds have used the 50-day Moving Average (which is basically the average of where Bond pricing has been for the past 50 days) as a floor of support. This 50-day Moving Average is rising underneath Bonds feet, helping pricing move higher, meaning home loan rates move lower. And even after Friday’s decline, Bonds clawed their way back above the 50-day Moving Average…and if they can hold their ground during the coming week, the improving trend appears to be good news for Bonds and home loan rates.Bottom line: in the absence of any surprises during the week, Bond pricing and home loan rates should stabilize and perhaps improve slightly, due to the positive technical picture currently in place.

Inside Lending for the Last week of 2006

And the New Year sure “started up” at double speed, but the action was destined to make more than a few grown men cry before the week was out. Bond pricing had improved throughout the holiday shortened trading week, and the stage was set for the high impact Jobs Report to be unleashed on Friday. But some interesting moves were going on behind the scenes on Thursday afternoon…here’s what happened.Late in the day on Thursday, economists reduced their official estimate for Friday’s Jobs Report number from 115,000 to 100,000, clearly indicating much lowered expectations in new job growth. This was largely based on ADP - the nation’s largest payroll processor - coming out earlier in the week saying that their numbers indicated net job losses for the previous month, no gains at all! Additionally, the Fed Meeting Minutes showed the Fed believes that US job growth is cooling. So…when Bond traders saw the late change in analysts formal expectations, they gobbled up even more Bonds ahead of the Jobs Report - figuring that the number would likely come in low, Bond prices would rally, and home loan rates would improve.But this was not to be. When the actual numbers from the Jobs Report hit, Traders were stunned to see an unexpectedly high December Jobs number of 167,000, with the Unemployment Rate holding steady at a very low 4.5%. Additionally, the Average Hourly Earnings in December shot 8 cents higher or 0.5%, far ahead of the 0.3% rise expected. This brings the average US hourly rate of pay to just over $17. And a deeper look at the hourly earnings figure showed year over year wages increased by 4.2%, which is the highest in four years!Traders quickly realized they were positioned on the wrong side of the market and began to sell, sparking a move lower in Bond pricing, and giving back some of the gains made previously in the week. But after the smoke cleared, Bonds still ended up on the plus side for the week overall, with home loan rates improving by about .125% across the board.

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