As a part of this update of activity for December 1, 2008 through December 15, 2008, click here to view the updates. There were a total of  6 new listings.  There were 2 pending sales.  Of the residential sales there was 1 sale over $2,000,000 and 1 multi-family sale under $400,000.  There were 8 sale completes.  There were 11 price decreases and no price increases.  The number of current listings are down slightly; however they are still very high at 311 listings specific to the Santa Ynez Valley.

Here is the latest and greatest update on loans. Rates continue to go up and down on a daily or even hourly basis.  We are checking daily with  lenders and trying to make sure our buyer have their loans locked in and for a long enough period of time if they are dealing with the purchase of a short sale.  Conforming 30 year fixed rates down to $603,000 are at 4.75% at 1 point and Jumbo Loans which are loans in excess of $603,250 are at 5.0% at 1 point for origination. The Jumbo 5 year ARM is at 5.75% at 1 points.  The 11th District Cost of Funds index (COFI) is down slightly at 3.11 for the month of January.  We are adding the 6 month LIBOR index to our update letter as it is becoming the standard for many Adjustable Rate Mortgages. FYI: LIBOR is the abbreviation for “London Interbank Offered Rate.” The 6 month LIBOR rate is at 2.02; last month it was at 2.69; 12 months ago it was at 4.05.

I hope all of you had a great holiday. Ours was terrific. We had lots of time with family and friends, and maybe even a few days of relative calm to get us geared up for a great 2009. I know the market has seemed a little slow of late but it seems that things are picking up a bit especially with the interest rates at their lowest for the year.

One of the big questions many of you have is “Are we at the bottom?” To be completely honest, I do not think anyone know for sure but I do know the inventory of lower end homes is disappearing as many people are trying to break into the market.  After all, a home is more than an investment, it is a place to live and call your own.  Regardless of whether we are at the true “bottom” or not, we are close and no one is going to ring the bell and tell us we are there.  Look at the current sales prices now and current interest rates and  figure out what your payment will be, Then, assume a little lower sales price but a higher interest rate, and figure out that payment, the net result will be a higher monthly payment.  The most important number is what the cost is to live in  your home on a monthly basis. The next question is “Can you afford it?”

The other issue I think the real estate owner has to think about is the amount of equity buildup you experience on a monthly basis as being the only true measure of investment potential. On a fixed rate fully amortized mortgage you can still build equity in your home by reducing the principal balance every month. Granted, it is not a lot initially but it does build every month.  For those people who are upside down on the value of your home in comparision to the loan.  Recovery is on the way. No one is sure how long it will take but your home will be worth more in the future than it is worth right now. So, if you can afford to hold on, take a little advice from NIKE and “DO IT.”  If you can not, do not despair, re-evaluate and come up with a plan.  Holding on is better than giving up.  A short sale is much better for your financial condition and rebuilding your position than a foreclosure. Marlene and I have been through at least 3 recessions and can help you figure out what to do, if you let us help.  We thank you again for your loyalty and support in seeking us out when looking at properties in the valley and for choosing in 2009 to get your information about Santa Ynez Valley real estate from…………….

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David Macbeth and Marlene Macbeth