Welcome to 2792 Indigo Circle, a stunning single-level craftsman's home that's only seconds to the beach. Enjoy top of the line finishes and details throughout, plus multiple private patios for entertaining or watching the evening sunset. Featuring 3 bedrooms, 3.5 bathrooms on a corner lot. When you enter the home, you'll notice all the warmth from the wood beam ceilings and wide trim around the large windows and French doors. The built-in bookshelves and tile fireplace make the front living room and dining room an inviting place to hang out. Around the corner is the gourmet cook's kitchen featuring Viking appliances, dual dishwashers, large center island with a prep sink, a wine fridge, tons of storage, and a large bay window. The family room flows from the kitchen and features 2 sets of French doors with a view of the iconic Morro rock and leads to a cozy patio, the large driveway and 2-car garage. Down the center hallway you'll find the large laundry room, built-in office space, a half bathroom, and three ensuite bedrooms. The elegant master bathroom features a large tub . The low maintenance landscaping with wrap-around stone walkways is all accented with solar lighting. The Cloisters is a coveted small neighborhood, offering privacy while being close to the beach and restaurants. This property truly stands out and is beach living at its finest!

Listing Agent: Lindsey Harn

REALTOR® | License #01868098

Christie's International Real Estate, Sereno DRE #02101181

It’s getting more expensive to live on the Central Coast, prompting some homeowners to maximize the use of their property - creating another source of income.

In this Price of Paradise segment, we take a closer look at accessory dwelling units - also known as ADUs - and how you may soon see more of these popping up in your neighborhood.

Take a look at some trends in recent years.

The City of Santa Barbara has seen a steady rise of ADUs being built since 2019. The numbers taper off a bit this year. According to the city planner, this could be due to a combination of factors - from supply costs, limited labor and other post-pandemic issues.

In Santa Maria, there has also been a steady increase in ADU permit applications since 2018. Over the last five years, more than 1000 permits were issued for ADUs. Last year alone, nearly 400 permits were issued and already this year - 300 have been issued. City leaders say - Santa Maria is on pace to meet or exceed last year’s total.

In San Luis Obispo, the number is staying pretty consistent. The city is averaging 70 permits per year over the past three years.

Paso Robles is also seeing an increase. Last year, the city pulled 26 permits for accessory dwelling units. So far this year - they have about 16 permitted - with more in the works - the city anticipates passing last year's total.

City leaders say the permitting process is becoming easier for homeowners, largely due to more lenient state laws.

The state is making an effort to keep up with housing demand - sometimes overriding city policies for ADUs.

“State laws requires the city to have an expedited permit process for accessory dwelling units," said Michael Codron, City of San Luis Obispo Community Development Director. "We are able to turn around our plan checks very quickly.”

“They keep over the years, making things even easier so providing even more ways that people can permit ADUs and sort of overriding in some cities own regulations,” said Rosie Dyste, City of Santa Barbara Community Development Project Planner.

“The intent with the accessory dwelling unit is that it gives existing properties the ability to provide homes and hopefully in a manner that is affordable for people to be able to rent,” said Darren Nash, City of Paso Robles City Planner.

While some local homeowners praise the benefits, other residents hesitate to jump on board with the trend.

“We’re seeing more and more people take advantage of this opportunity whether it’s for family - or a way to afford a property.”

Lindsey Harn bought a home in San Luis Obispo back in 2017. Back then it was a two=bedroom, one-bathroom house.

She then added two legal bedrooms - bathroom drywall and a kitchenette - turning her attached two-car garage into a separate living space.

“I was able to create an affordable space for people who live and work here,” said Harn.

“If I were to have purchased this property as a four bedroom, two bath I would have had to pay a significantly higher price than buying a two bedroom one bath," said Harn. "The cost to convert this space was very affordable.”

The rise in popularity of ADUs is seen throughout Central Coast neighborhoods and now even new home developers are catching on.

Bryn Britton recently scooped up a brand new home in the San Luis Ranch community - with an ADU already attached.

“You’re just providing more opportunities in a community where it can be expensive to live,” said Britton.

She says homes with her floorplan are sprinkled throughout the development - something that’s more common in recent years.

“We have the opportunity to rent it out and offset some of the mortgage payments,” said Britton. “A few years ago, the state of California instituted some policies where they are encouraging ADUs and being able to provide more housing so it offsets the cost of housing since it is really expensive.”

While ADUs can help alleviate a tight rental market - or some breathing room for a homeowner - not all neighbors are jumping on board.

“While helping the shortage of housing - for ya know - granny units and ADUs - it’s just increasing the property values and making it harder for someone like me to buy a house in this area,” said Justin White, San Luis Obispo resident and Publicis Senior Software Engineer.

“These cars have to go somewhere. ADUs are not required to provide parking," said Allan Roy Cooper, Save Our Downtown Secretary. "We are beginning to confront a situation in the city where there’s less parking available. ”

By: Genelle Padilla

Posted at 10:39 AM, Oct 24, 2022 and last updated 11:58 AM, Oct 24, 2022

‘Mild’ recession could lower California home prices in 2023. What about SLO County?

Home prices, mortgage rates and the number of homes sold are all predicted to decline in California in 2023, according to a new report from the California Association of Realtors (CAR).

The decreases follow two years of coronavirus pandemic-related spikes in the statewide housing market, and before what CAR predicts to be a “mild” recession.

While would-be home buyers will likely welcome the shift in housing costs, the Realtors group also predicted a slight drop in overall home affordability.

How could that affect San Luis Obispo County’s real estate market?

“Housing is most people’s No. 1 expense, so if the housing expense stays high ... it’s going to cause people to either rethink their housing payments or rethink their spending habits,” local Realtor Lindsey Harn said.

RECESSION COULD MAKE HOUSING CHEAPER, BUT LESS ACCESSIBLE

According to the CAR report, the median home price in California is forecast to decrease by around 8% to $758,600 in 2023.

In 2022, statewide home prices increased by 5.7% to $831,460.

Housing affordability is projected to take a small hit next year, dropping from 19% in 2022 to 18% in 2023, the report said.

Harn said these housing market changes will likely impact SLO County to a lesser extent than the rest of the state, but added that there will be noticeable changes for home buyers and sellers.

“I think San Luis (Obispo) County will always outperform California on the average, because of the fact that we’ve just got so many variables that bring people to the area,” Harn said. “I stand with my belief that if there’s an overall decline, yes, we will feel it.

“But are we going to feel it as intensely as some of the less desirable counties in the state? I don’t think we’re going to feel it to the same extent.“

Harn said SLO County’s “rock bottom” looks different from other California counties’ low points from a housing perspective, based on the 2008 economic recession.

SLO County has more jobs now than it did in 2008, Harn said, “so it gives me hope that we will actually outperform what we did in ‘08 and ‘09.”

On top of improved job performance across SLO County, Harn said there are fewer bad mortgages, thanks to lessons learned from the 2008 housing market crisis.

In today’s tighter lending environment, there’s less chance of the bottom falling out of the real estate market and causing a true collapse, she said.

As of Thursday, 30-year fixed-rate mortgages have reached 7.08%.

With minimal declines in 30-year mortgage rates forecast in 2023, Harn said mortgages more than price could be the determining factor for prospective buyers.

Harn said if inflation becomes more manageable and stops forcing mortgage rates so high, 30-year fixed-rate mortgages could settle closer to 4% or 5%, which she said is “much healthier and affordable” for buyers and sellers.

If the stock market’s performance makes a dramatic fall, Harn said home values will follow, which is why the CAR report mentioned the coming recession.

According to the CAR report, the U.S. gross domestic product will dip by 0.5% in 2023, after a projected uptick of 0.9% in 2022.

The report also predicted a slight increase in unemployment.

“With California’s 2023 non-farm job growth rate at 1.0 percent, up from a projected increase of 4.9 percent in 2022, the state’s unemployment rate will edge up to 4.7 percent in 2023 from 2022’s projected rate of 4.4 percent,” the report said.

WHAT HOME BUYERS CAN LEARN FROM NEXT YEAR’S FORECAST

Barry Brown, an Arroyo Grande Realtor with 19 years’ experience in South County, said the Five Cities area of SLO County faces slightly different real estate challenges from the rest of the county.

“I think we are a little bit of a bedroom community for San Luis Obispo, because it is a little less expensive to live in Arroyo Grande and Grover Beach and Oceano, than in San Luis Obispo proper,” Brown said.

The market in the South County area, he said, tends to be more stable than other parts of SLO County, which are more sensitive to the state’s market shifts.

However, there are market factors that transcend these local differences in home prices and transactions, Brown said.

He said the biggest one driving the market in SLO County is the Fed’s current 7.08% mortgage rate.

“It doesn’t take a lot of math to figure out what that does to affordability,” Brown said.

Someone who bought a home for around $875,000, the median home price in the city of San Luis Obispo, would have had a monthly mortgage payment of $3,000 last year, when mortgage rates sat around 3%, Brown said.

Now, with rates around 7%, that person’s monthly payments are closer to $4,500 before taxes.

Those rate changes represent a “huge impact on the entire market,” Brown said.

The number of real estate transactions in SLO County, Brown said, are down 27% compared to this time in 2021.

That allows for an increased stock of unpurchased inventory on the market, which he said is up 47%.

“We say a balanced market is somewhere between six and seven months worth of inventory on hand,” Brown said. “That’s if no other homes came on the market, the supply would exhausted in six to seven months. We (have) probably about two to two and a half months worth of supply right now.”

Like Harn, Brown said the current lack of bad loans like the ones that contributed to the 2008 recession means the housing market is better protected against major economic shifts.

He thinks the California housing market will slow less than CAR’s forecast envisions.

Going into the next year, Brown said people are still better off buying homes even in a volatile real estate market than renting.

“I don’t think anybody has a crystal ball to be able to predict exactly what’s going to happen,” Brown said. “But if you’re going to live in the home, and you’re not going to treat it as a piggy bank, then I think that there’s still going to be plenty of people that want to buy homes.”

BY JOHN LYNCH
This story was originally published October 28, 2022 9:00 AM

Mortgage rates blow past 6%. Here’s what it means to SLO County home buyers

For the first time in 14 years, mortgage rates climbed above 6%, surpassing the interest rate’s peak during the Great Recession. According to recent data from the Federal Home Load Mortgage Corp., known as Freddie Mac, 30-year fixed rate mortgages, the most common type of mortgage product, reached 6.7% on Thursday, Sept. 29, as the Federal Reserve raised interest rates to fight inflation. The most recent mortgage rate was more than double what it was one year ago, when rates sat at 3.01%, and marked the highest the 30-year fixed rate mortgage has hit this year, surpassing this year’s earlier peak of 5.81% in late June.

30-year mortgage rates cleared 6% Sept. 15, amid a six-week increase beginning Aug. 18 that saw rates climb around 1.5% from 5.13% to the current 6.7%. In San Luis Obispo County’s pricey housing market, the ripples of those high rates are already being felt by home buyers, local experts say.

LOCAL MORTGAGE EXPERT: FED ‘IN DENIAL’ ABOUT POTENTIAL RECESSION

Fernando Granados, a local loan originator with Envoy Mortgage in Arroyo Grande, said rates rising to the most recent peak represent the coming of another recession, despite some of the recent improvements seen in the economy. The Fed has been “in denial” about the impact of inflation, Granados said, and is now making up for some of the lost ground in the fight. “Inflation has snuck up on us now — I believe we’re on the verge of a recession, and the only way to fight inflation is to raise the rates,” Granados said. “The Fed is raising the rates now, and they’re going at such large increments because they fell behind.”

On top of that, the limited available stock of homes in the U.S. could keep prices and demand high despite the high mortgage rates. There are only around 700,000 to 800,000 available homes on the market nationwide, Granados said, and many of those homes are already under contract. However, no matter what the Fed does to adjust interest rates at this point, a recession will likely come, Granados said. That isn’t necessarily a bad thing for the housing market, he said, because while a recession will certainly hurt the wallets of millions of Americans, it will eventually begin to level out the housing market’s prices and mortgage spikes.

“If you look back in history, for the last 60, 70 years ... inflation hits, and when it’s followed by a recession, usually right after the recession, the rates start coming down,” Granados said. “We’re almost out of this. I’m thinking (in) the last quarter of this year or beginning quarter of 2023, the rates should start coming back down.” If recessions typically happen once every 10 years and the most recent major economic recession occurred in 2008, he said, then the economy is overdue for a downturn. That doesn’t mean rates will return to the sub-3% levels that were maintained during the COVID-19 pandemic’s housing surge, Granados said.

And it doesn’t mean mortgage rates and prices will instantaneously drop to the extent they did during the Great Recession, real estate broker Alex de Alba with The Real Estate Company of Cambria said. “In 2008, anyone would qualify for a loan, and people were unfortunately placed in a position to fail,” de Alba said. “After learning from our past mistakes, most banks have still been very strict on their loan requirements, making sure that the borrowers are well qualified.” Granados believes 30-year fixed-rate mortgage rates will settle around 4% give or take when the dust clears from any downturn or recession.

Richardson Properties Realtor Lindsey Harn agreed with the potential 4% resting place for rates once the bubble bursts. “There is no normal, yet according to the most recent Fannie Mae projection rates, next year we should be back in the mid 4% range,” Harn said. But before that happens, rates may reach their peak in early November, Granados said, though if they keep growing at the same rate as today, that could put them north of 7%, a mark not seen since February 2001.

SLO COUNTY HOME BUYERS HESITANT TO PULL THE TRIGGER ON HIGH MORTGAGE RATE HOMES

Granados said high mortgage rates are already causing a slowdown for his SLO County business, where he said he has several customers who have been approved for mortgages for between four and six months. “(Those customers) make the same amount of money, the house is the same prices as they were six months ago or four months ago, but because of the interest rate, their payment is much higher now,” Granados said. However, there are reasons buyers can be optimistic about the future, both Granados and Harn said.

While Granados said home prices and rates are not intrinsically linked, Harn said rates this high will eventually cause prices to “flatten” as buyers are priced out by high interest. Additionally, those high rates may make applying for housing less competitive than it has been during the most recent housing boom, Harn said. “I would expect to see fewer multiple offers and a lower rate of appreciation during the periods where the interest rates are this high,” Harn said. In the immediate sense, Granados said while high prices and high mortgage rates may be discouraging, prospective home buyers should get into a home as soon as possible, admitting he might be “a little biased” because of his profession. At the very least, he said, buying a home will at least guarantee that payments will not rise year over year, a concern that is always present in an era of skyrocketing rents.

Harn gave similar advice, advising buyers to “marry the house, date the interest rate,” meaning looking to refinance the mortgage at a more favorable date or taking advantage of the complimentary refinances some local lenders may extend once rates cool down. “As a buyer, I would see this as a great opportunity,” Harn said. “The high rates may scare other buyers off, so a buyer could actually get a better price now, with less competition than waiting six months for rates to go back down.” If a recession is averted, buyers should closely watch the state of inflation, Harn said, as once inflationary pressures begin to ease, rates will start falling. The interest rate bubble will have to burst eventually, Granados said, and for better or worse, the next three to six months will determine whether rates will drop or become even more “ridiculous” than they are now. “It’s like a storm,” Granados said. “We’ve got to weather it, and we’ve got to just get to the other side.”

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Tight housing market forces home buyers in SLO County to leave their priorities at the door

When Samantha Meyers and her family started their search for a new house during the remote work boom of the pandemic, they thought they’d be living in a different city from the one they ended up settling in.

Meyers said she originally intended to move from the Bay Area to San Luis Obispo, but ended up purchasing her home in Arroyo Grande instead.

“We loved the Sinsheimer neighborhood in SLO, and unfortunately it just didn’t end up working out — there weren’t homes with the size that we needed for our family and the space needs that we had, so we ended up looking in Arroyo Grande,” Meyers said.

Her family also had to compromise on price, as she had to offer around $75,000 more than the asking price to purchase the property.

Meyers’ story is becoming more common as the tight housing market in SLO County and elsewhere is forcing home buyers to compromise more than they might normally on the specific demands of their homes-to-be, according to a new report from Anytime Estimate.

In fact, the vast majority of home buyers — 80% — are scaling back expectations on the priorities in their housing search in some way, the report said.

“Most people are having to see the purchase of a home as a project, and realizing that they need to maybe live there a little while and then get some of the updates,” said Christa Lowry, a Coldwell Banker Premiere Real Estate Realtor in Pismo Beach.

Lindsey Harn, a Realtor for Richardson Properties in San Luis Obispo, said that’s not necessarily unique to the current market conditions or location, which she said is cooling slightly.

“For a lot of buyers, especially if it’s their first or second purchase, compromises are involved just because what their dollars get them and what their dreams are aren’t necessarily in line,” Harn said.

Harn said that in much of SLO County, homes only average seven to 10 days on the market, giving buyers a small window to make a decision.

“I typically would tell people if (the home) meets about 70% of their needs, wants and desires, to strongly consider it and to maybe consider driving by it a couple of different times during the day, (and) walking around the neighborhood to get a feel,” Harn said.

Amenities such as the type of kitchen, flooring and finishes, Lowry said, are of less concern than simply getting a house in the first place. Plus, those issues can be addressed through remodeling later.

Sometimes, the competition is so tough, buyers have to give in on more prominent features of the home, like its number of bedrooms.

None of those factors seem to deter buyers, who are now looking for available housing rather than housing that fits their specific needs, Lowry said.

That being said, Lowry noted that remodeling a fixer-upper is also more of a challenge now than it once was.

“The cost of goods is so high right now that people are having a hard time with their fixer-uppers because they can’t update it as much as they want,” she said.

Harn advised first-time buyers to avoid fixer-uppers that require larger investments of time, labor and money, particularly once the cost starts exceeding $40,000 to $50,000.

Cosmetic upgrades like paint or replacing countertops are much more feasible for first-time buyers, Harn said. Further complicating the remodeling process, Lowry said, building goods such as lumber are in low supply, raising their price. The price of building goods is also elevated by inflation, which is still affecting the construction industry, she said.

Those supply chain delays limit what buyers can do with a fixer-upper, Lowry said.

If a bathroom used to cost around $15,000 before the current period of inflation and supply chain problems, it now costs closer to $22,000 or $25,000, she said.

MORE BUYERS CHOOSING FIXER-UPPER HOMES

The report agreed with Lowry’s experience, as 55% of buyers purchased what they considered a fixer-upper, though 24% of those buyers regretted their decision to buy a home that requires extra maintenance.

“Because they’re just excited to have a home — to be able to purchase a home — they’re willing to give up a lot,” Lowry said.

Younger, first-time buyers in particular — like millennials, who the study found make up 66% of first-time buyers — are more likely to spend more and take larger risks on their first home, the report said.

“We are seeing more and more millennials get into the housing market, and I think it’s a very wise thing for them to do as wealth shifts from Baby Boomers down to the next generation,” Harn said.

These younger first-time home buyers were 8% more likely to compromise on their demands for a new home, the report said, and 22% of all buyers in the survey ended up dissatisfied with their homes.

“After previously buying in ‘normal’ market conditions, repeat buyers were 75% more likely than new buyers to be dissatisfied, but the market left much to be desired among first-timers who struggled to find affordable homes,” the report said.

Lowry said priorities in home buying on the Central Coast differ from the three things the survey had found most buyers prioritized: a good neighborhood (50%), an affordable home (45%) and short commute (39%).

In her experience with buyers here, Lowry said, home-buying priorities focused more on the home’s floor plan, location and potential for future investments.

“Can we update it and sell it for more?” she said. “Does it have enough room or land to do what we’d like to do with it? Could we build on an ADU (accessory dwelling unit) or extra room that we could use as income potential?”

Harn said with the advent of widespread remote work, concerns over length of commute are lessened, while access to school districts and outdoor space are more relevant to the average SLO County home buyer.

That was the case for Meyers, though she said her home in Arroyo Grande has met her needs so far.

“Even though we thought we compromised to begin with, I think that where we ended up was actually the optimal solution for us,” she said.

This story was originally published SEPTEMBER 07, 2022 5:00 AM by JOHN LYNCH

FOR IMMEDIATE RELEASE 

Contact: Lindsey McConaghy, Monde PR

Phone: (805) 471-0165

Email: lindsey@mondepr.com

Lindsey Harn of Richardson Properties 

Featured in "Designing Spaces™" TV Program 

[San Luis Obispo, CA August, 2022] Richardson Properties, San Luis Obispo’s leading real estate brokerage, today announced that Lindsey Harn has been featured in Designing Spaces™, an award-winning home improvement show airing on Lifetime TV. The segment talked about the benefits of using solar energy to power homes and businesses, and the positive impact on property resale values.

Lindsey was interviewed about her experience installing solar panels at her home in San Luis Obispo with REC Group. “We spent some time analyzing my current bills and PG&E usage, and then looked at what I might need in the future to determine how many panels I would need. It was a very thoughtful approach to ensure I have the best experience possible.

“REC then came back with drawings and 3D diagrams so I could see how the panels would appear on the house. I was very concerned with aesthetics so they were careful to place the panels in a way that didn’t ruin the architecture or the look of my home.”

The segment went on to talk about how Lindsey tracks her energy usage. “I have an app I can check to see what the panels are generating, what I’ve done to offset my carbon footprint and how much I’m saving. The technology that allows me to monitor the system has been incredible.” 

Lindsey also talked about available tax credits and resale benefits of using solar energy. “Another reason I got solar was to take advantage of several state and federal tax credits. These actually offset the physical cost of the panels. As a real estate professional I can also attest to the fact that owning your solar panels outright can be a huge value-add on the resale of your home.”   

Last April the County of San Luis Obispo completed its largest solar project to date with ForeFront power. The 1.2 MW ground-mounted solar system was projected to offset 10% of the County’s total energy usage with renewable energy. 

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About Richardson Properties (www.richardsonproperties.com)

As San Luis Obispo County’s leading real estate brokerage, Richardson Properties | Christie’s International Real Estate, provides innovative solutions and superior customer service through a team of dedicated professionals. The team strives to exceed client expectations while positively shaping its local communities. 

As an exclusive Luxury Portfolio International® brokerage and member of Leading Companies of the World®; Richardson Properties offers an incomparable level of service and global visibility under brands that stand for trust, discretion, and excellence.

Leading the Way in Residential and Luxury Home Sales on the Central Coast.

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