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December 2024 Central Coast Housing Market Outlook – Home Values, Mortgage Rates & What to Expect in 2025

Hello! Thanks for tuning in to this month’s newsletter. Our goal is to bring you valuable real estate content and local updates, so we hope you enjoy it. 

We would also love to hear from you! Let us know what type of content you’d like to see more of in next month’s newsletter!

In this e-newsletter, we’ll provide our end-of-year reflections, share the latest data about mortgage rates, and provide a link to our most recent podcast episode. We wish you all a Merry Christmas and happy new year!

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!

2024 is Coming to a Close

For many of us, 2024 was filled with high highs and low lows. Each year provides different opportunities for growth, and some of those opportunities are more challenging than others. If this year was particularly challenging for you, we see that and are with you in that. Maybe this year was the best one yet, especially if you bought your first home. As your trusted real estate team, we want to be the resource for you in all aspects of life, and we celebrate all the joys alongside you. 

For us, we welcomed our second baby into the world at the beginning of the year, and adjusted to life as a family of four. It is the greatest gift to be parents, and we are forever grateful for our blessings. We also experienced extreme challenges with awful contractors that ended up scamming us, and we are still dealing with those repercussions. Through it all, we rejoice in the blessings and learn from difficult times.

To all 51 families our team had the opportunity to serve this year, we thank you for trusting all of us with your business and giving us the privilege to be a part of your real estate journey. To everyone who referred us to their friends, family, or coworkers, thank you! It means the world when we get to help your loved ones achieve their real estate goals, so thank you very much for all the referrals. 

If you are considering making a move in 2025, we’d be happy to get together and create a customized game plan to make your dream a reality. 

We are for you and grateful to each of you!

 

Projections for 2025

The National Association of Realtors has released their forecasts for 2025 and the projections are… positive! “Home buyers will have more success next year,” said Lawrence Yun, NAR’s chief economist. “The worst of the affordability challenges are over as more inventory, stable mortgage rates and continued job and incoming growth pave the way for more Americans to achieve homeownership.” Doesn’t that sound great? If you already bought a house this year or last, congratulations! It was very difficult to get into the market with some of the recent challenges, so if you made it work, you should be proud of yourself. If you’ve owned a home for longer than that, very well done. Most likely you are sitting on a handsome amount of equity. If you haven’t been able to get into the market yet, then 2025 may be your year! Here is why.

Rates

Inflation has come mostly under control, and the Fed has been cutting rates. They were down as low as 6% a few weeks ago and they are now back up to the mid 6s. If rates continue to slide back down to the 6% range, there are approximately 6.2 million buyers in the country that will get back into the market. Because rates will be coming down and stabilizing, more homeowners will be listing and selling their homes. Rates are expected to be around 6% for the remainder of 2025 and 2026. For a more accurate view on what rates are doing, check out the chart below. 



Inventory

The “rate lock effect” is wearing off, and existing home sales are expected to tick up 7-12% in 2025. The traditional home seller is also a traditional home buyer, so whenever there is a new listing hitting the market, that seller is typically also buying something else. If they are relocating locally, the additional listing is a net zero for the market because that person will be buying another home on the market. If they are moving out of the area, then it is a +1 for the local inventory. The only other way we can get more positives on the inventory front is new construction. The good news is that we do have quite a bit of new construction coming online nationally, and even some locally. Avila Ranch, San Luis Ranch, Righetti Ranch, and more are continuing to pop up. These new developments are great options for buyers because there are no bidding wars. Whoever sees the house first and puts down their deposit wins, which is why it’s important to contact us quickly if you see a new construction home you want to check out! 

Prices

Due to the above two trends, prices are expected to rise next year in California by about 4.6%, returning to a historically normal level compared to some of the double digit growth we saw in 2021 and 2022. This is a wild concept, but that means that every month, homes are going up by about 0.38%. Every quarter you wait or own a home, its price will go up by about 1%. That can be really exciting if you already own a home, and it can be really motivating to get into homeownership early if you aren’t there yet because every quarter you wait, those homes will be getting 1% more expensive. We are still seeing that the cleanest, best priced house is flying off the shelf. The homes that are sitting longer are the ones that are overpriced and/or not in the best condition. However, sometimes the ugly duckling can turn into a beautiful swan with a little bit of sweat equity and some DIY projects. Other times, the property really could be a money pit, and it’s important to know the difference.

Looking for a Career Move in 2025?

Do you want a new career in 2025? Are you ready for a change of pace? What about a career in real estate? We are hiring for a Director of Operations / Executive Assistant. We are looking for someone who pays attention to detail, enjoys following systems and processes, thrives in a stable environment, and can keep up with multiple ongoing projects. For more information about this role, check out our job description on Indeed.

Does becoming a Realtor excite you? Check out FirstTuesday for getting your real estate license or renewing your current license. We even have a code for you to get 15% off on any of those licensing courses. Go to www.calpaces.com and enter the discount code: 6129. 

Did you know that 89% of agents fall out of business within the first 5 years? That is why it is important to join a really great team and brokerage. You want to make sure that you will be getting coaching, accountability, leads, and systems to help you succeed. Reach out to us as well if you’d like to explore a career in real estate!

The Happy House Hacking Podcast



Navigating the Changing Real Estate MarketFeeling priced out of the California housing market? In this episode, we break down three key trends that are shifting the market in your favor: dropping interest rates, rising inventory, and buyer broker agreements. Learn how these changes impact affordability, increase your buying power, and make now the perfect time to explore house hacking strategies. We’re Realtors and investors who have successfully house hacked ourselves, so we’ll give you the inside scoop on how to make it work for you.

Dream Makers: Making a Difference in Our Community

Did you know that The Schwaegerle Team donates 2.5% of every transaction to Dream Makers? Dream Makers is a local nonprofit dedicated to making dreams come true for terminally ill adults in our community.

Coming Soon
4 bed/4 bath Rice Ranch home in Santa Maria – $1,000,000
3 bed/2 bath on 15 acres in Atascadero – $750,000
2 bed 2 bath townhouse in Arroyo Grande – $525,000
4 bed 1.5 bath house in Lompoc – $520,000

Current Active Listings 
1981 Green St, Cambria – Multifamily Zoned 1.25 acre lot Senior Affordable Apartment project
290 Daffodil Ave, Nipomo – 5 bed/3 bath spacious home in Nipomo 
3860 S Higuera St #B4, San Luis Obispo – 2 bed/1 bath affordable living in SLO
3960 S. Higuera St #22, San Luis Obispo – 3 bed/ 2 bath in Creekside Mobile Home Community

Just Sold
110 Seacliff Dr, Shell Beach – $1,750,100
17750 Laurel Rd, Morgan Hill – $900,000
230 Oak Hill, Lompoc – $755,000
3681 Les Maisons Dr, Santa Maria – $665,000

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
@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!

Written by Owen & Camille Schwaegerle on . Posted in Local Events, Real Estate News, Real Estate Tips, The Happy House Hacking Podcast, Uncategorized
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