With credit availability for builders in the new home market remaining limited, along with other supply chain constraints, new construction is being held back limiting the supply of new homes.  Supply at the current sales rate remained unchanged at 4.1 months, with a rise of only 5,000 new homes on the market in the month.

New home sales measure the number of newly constructed homes with a committed sale during the month.  The level of new home sales indicates housing market trends and economic momentum along with consumer purchases of goods such as furniture and appliances.  Billed as this year’s big economic story, home price appreciation appears to be playing out.  This points to rising confidence and spending among homeowners.

Continuing claims also show some positive news, which are down 112,000 in the May 11 week, putting them at a new recovery low of 2.912 million.

What little girl doesn’t have dreams of living in a fairy castle? When I was little, I remember my friends and I would draw pictures of our dream homes – often involving elaborate pools and rivers and castle-like structures.

And, let’s be honest, those dreams still resonate today in one form or another today. Even if that fairy tale castle is now a multi-million dollar estate, people still fantasize about owning extravagant properties.

The standard multi-million dollar estate may be nice for some, but for me, a castle still seems fitting. Perhaps I’d settle for a vineyard estate in Paso or even this extravagant mansion in Cambria. But without the mote, knights, and fortress walls, something just seems to be missing.

Which is why I was thrilled when I saw that Eagle Castle Winery in Paso Robles (complete with mote!) is on the market! At $6.9 million I’d consider this fairy tale property a bargain (although it’s still a little out of my price range).

Property Features

Eagle Castle Winery sits on 25 acres, including:

• 17,000 sq. foot winery
• 11 acres of vines (Cabernaet Sauvignon, Merlot, Syrah and Zinfandel)
• 3,900 square foot tasting room.
• Two additional houses (currently being rented)

The main residence, which currently serves as the tasting room, features 3 bedrooms, 2 full bathrooms, an expansive dining room and bar. and a large rooftop patio. The Castle title of Eagle Castle Winery is not to be taken lightly- the residence also included a mote surrounding the building and a large exterior brick fence.

This property is certainly for a unique buyer who’s (literally) looking to live a life of royalty. I was bummed to hear that the property may currently be in escrow to be sold to a California-based buyer.

I hope, at least, that whoever buys Eagle Castle Winery keeps the vineyards and tasting room open to the public. That way, I can at least enjoy a glass of Zinfendel at a residence so similar to those I imagined living in when I was younger.

Existing-home sales rose in April with a seasonally adjusted increase  of 0.6 percent from March and an increase in resale activity of 9.7 percent above the April 2012 level, according to the National Association of Realtors.  Although all regions are showing strong price gains from a year ago, sales levels still remain below underlying demand, signaling the need for higher levels of new home construction.

Median existing-home prices was $192,800 in April, up 11 percent from April 2012.  This marked the first time there were 14 consecutive months of year-over-year price increases since April 2005 to May 2006.

The median time on the market for all homes also decreased this month.  With a median time on the market of 46 days in April, not only was it down from 62 days in March, it was also 45 percent faster than the 83 days on the market in April 2012.

This week, mortgage rates continue to tick up, showing slight increases in APR for the majority of the programs. Keep in mind, though, that rates are still at historically low levels. Keep reading for the full 10-program CCL Rate Tracker, including graphs of the most recent two-week movement.

Give us a call at 805.543.LOAN to learn more about how to take advantage of record low mortgage rates.

Conforming Loan Programs

Conforming (30-year Fixed)

3.375 percent (3.481 percent APR)

+ 0.030 percent APR

For more information about the Conforming 30-year fixed loan click HERE

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Conforming (15-year Fixed)

2.500 percent (2.675 percent APR)

+ 0.054 percent APR

For more information about the Conforming 15-year fixed loan click HERE

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Conforming High Balance (30-year Fixed)

3.625 percent (3.674 percent APR)

+ 0.125 Rate

For more information about the Conforming 30-year high balance loan click HERE

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Manufactured Conventional (30-year Fixed)

4.000 percent (4.108 percent APR)

+ 0.032 percent APR

For more information about the Manufactured Conventional loan click HERE

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Specialty Loan Programs

FHA (30-year Fixed) -

3.125 percent (4.251 percent APR)

+ 0.056 percent APR

For more information about the 30-year fixed FHA loan click HERE

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FHA 203k (30-year Fixed) -

3.375 percent (4.406 percent APR)

+ 0.125 percent Rate

For more information about the FHA 203k 30-year fixed loan click HERE

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VA (30-year Fixed) -

3.125 (4.251 percent APR)

-0.125 percent Rate

For more information about the VA 30-year fixed loan click HERE

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Central Coast Lending is a California mortgage brokerage based in San Luis Obispo County. With offices in San Luis Obispo, Morro Bay, Paso Robles, and Arroyo Grande, Central Coast Lending is the top source for Central Coast mortgage, real estate, and home loan needs. To see why using a broker offers lower rates and superior service, click HERE. For a free, hassle-free online pre-qualification click HERE or call 805.543.LOAN to talk to one of our expert loan officers.

Download the episode to a media device and take it along with you on the road, office, or gym to catch up on the latest economic, real estate, and mortgage news and analysis.

Mortgage Matters airs every Saturday from 10 a.m. to 12 noon on KVEC 920. Central Coast Lending hosts Daniel Podesto and Jason Grote keep listeners up-to-date on the news, answer caller questions, and interviews local professionals.

Tune in as Mortgage Matters Radio hosts Jason Grote and Dan Podesto discuss the recent increase in jobless claims, the increase in median price for new and existing houses, and the confidence in the economy’s future health.  Later, Jason and Dan are joined by Dan Ferreira from Ferreira Contracting.

News Update

 So, what’s been in the news this past week? Jason and Wes give us a rundown:

• Jobless claims jumped by 32,000 to 360,000 in the week that ended May 11
• Unemployment fell to 9 percent in April, the lowest point since November 2008
• California has added more than 273,000 jobs since April 2012 with the construction industry posting some of the largest gains
• The median price for new and existing houses and condominiums in California hit $324,000, up 22.7 percent from a year earlier
• This increase signaled the 14^th straight month that the median price rose from a year earlier and the highest level since June 2008
• There were 39,051 homes sold in California during the month, up 2.1 percent from a year earlier and the average time on the market last month was 27.9 days, down from 48 days a year earlier
• The consumer price index fell 0.4 percent in April from March
• Year-over-year prices rose 1.1 percent—the smallest year-over-year increase in two and a half years
• The producer price index also fell a seasonally adjusted 0.7 percent in April from March, the steepest since February 2010
• However, the gauge of economy’s future health is up with American’s confidence in the economy climbing in May to the highest level in almost six years

Local Guest: Dan Ferreira, Ferreira Contracting

During the second half of the show, Jason and Dan talk with Dan Ferreira of Ferreira Contracting about his start in the construction business and how the industry is doing in San Luis Obispo.  With a Cal Poly education and years of prior experience of managing home building and commercial businesses before starting his own business, Dan  heads up Ferreira Contracting with a passion for people and enthusiasm for building.

Listen to this episode now

You can download this episode HERE

The answers are “yes”, “yes”, “no.”  Did you get the them correct? Because many Americans are still a bit confused about such mortgage basics, finds a recent Zillow poll.

Zillow put together a “Mortgage IQ” test, which features 10 questions used to gauge familiarity with the mortgage process. Some questions (like if borrowers can get a mortgage with a low down payment – see FHA, USDA, and Conforming Financing), underscore beliefs that could keep potential buyers out of the marketplace, and harm borrowers that have qualified for a mortgage (not knowing they could shop around).

Of respondents, 34% didn’t know that programs exist for down payments under 5%. Over one-quarter (26%) believe that they must close their loan with the original lender that pre-approved them.

You can take the quiz here.

And just as a side note (and a bit of an indulgent pat on the back), this is why we have made it our company mission statement to educate potential borrowers as much as possible. (Check out Mortgage Matters Radio every Saturday from 10 a.m. to 12 noon for more!)

We encourage borrowers to shop around as much as they like; we are confident that our mortgage rates will be lower and our service superior. In other words, we don’t rely on cheap tricks or misinformation to make our business go.

Call us any time (805.543.Loan) or email us (info@centralcoastlending) with any of your mortgage or real estate questions.

The National Association of Realtors (NAR) registered an 11.8% year-over-year price gain between the median home price in March 2012 and March 2013. Other home price trackers such as FHFA, Zillow, and Case-Shiller have also shown significant movement.

Demand for real estate is high. Part of the reason why prices are rising is that there isn’t enough supply to fill demand. Six months supply is considered “healthy” for a market, but in March there was only 4.6 months of inventory nationally, according to the NAR. As buyers look for a diminishing supply of properties, prices are move up as bidding raises competition.

Locally, we have seen a similar story. San Luis Obispo County prices are up 13.3% since the end of 2012.

Atascadero poses an extreme local example. With just 2 months of inventory on the market, prices are up 15% from the end of 2012.

With so much price appreciation, we are hearing rumors about another real estate “bubble.” Are we in such territory? No, says Trulia.

Bubble-phobes can rest easy. Even with recent sharp home price increases, prices are still low relative to fundamentals and are far below bubble levels.

The gist of Trulia’s point is that any bubble would have to bring prices above their “fundamental value.” By comparing current market conditions with historical prices, incomes, and rents, Trulia created several measures of fundamental value.

Their findings?

Home prices are still “undervalued” by 7% in 91 of the 100 largest metros. (Of the nine “overvalued” metros, California has four: see sidebar to the right.)

Trulia also points out (as does CCL’s Jason Grote in our recent article that questions the bubble narrative) that “mortgage credit remains very tight” and that people are actually qualifying for mortgages they can afford, whereas the previous crash toxic mortgages “artificially inflated housing demand” by expanding borrower eligibility.

Read the full report here.

“I realize that this week, rates aren’t as low as they have been, but keep in mind that the 3-4% range of the 30-year fixed will be a thing of the past in 24 month,” said Grote. “We will miss them, and the people that took advantage will be the winners.”