Local Real Estate Update
Sandy Nichols introduced the speaker: he's a wonderful guy; has lived here forever and a good Rotarian.
House prices are now attractive especially with an $8,000 tax credit for first time buyers and low interest rates. Jumbo loans are also attractive. The National Association of Realtors reports that 53% of sales are first time buyers. Locally, in May, 45 houses were sold in the Five Cities area as compared to 25 in April. In Santa Maria, two years ago, 50 houses sold; last month 103 were sold as it is a good market due to lower prices. In the Five Cities area, a house that sold for $610,000 is now worth $390,000; down 36%. In SM, a house that sold for $440,000 now sells for $225,000; almost 50%.
If you bought your house in 2002, you are now about even. It's still a buyer's market in the Five Cities. Banks that own real estate are aggressively seeking mortgage modifications to allow people to stay in their homes. If a house is purchased for $350,000 with a 20% down payment, about $90,000, and an interest rate around 5%, payments would be about $1500 per month plus taxes/ins. Rents for the same house would be around $1600-1700 so houses are becoming more affordable. It takes the 400-500 realtors in the Five Cities area about 7.7 months, on average, to sell a house. Dick Keenan's presentation was well done supported with good power point graphics.