Central Coast market in better shape than others
Saturday February 16th, 2008 - 1:23:18 am
Dan Reddell Email
Friday, Feb 15, 2008
Biz Buzz: Housing economist puts money on boomers
The Central Coast is suffering as the housing market slumps, but it may be in better shape than many other California regions, said Leslie Appleton-Young, chief economist for the California Association of Realtors.

“One of my key messages is that real estate is local,” said Appleton- Young, who spoke at a conference Thursday called “Special Weapons and Tactics to Survive a Down Market.” It was held for real estate professionals at the Embassy Suites Hotel in San Luis Obispo.

Unlike in the Central Valley and Riverside County, for instance, San Luis Obispo County’s real estate market has depended more on wealthy baby boomers who could afford to buy expensive homes, rather than on first-time buyers who may not have been able to afford a home except by way of a subprime mortgage.

“The higher end of the market has done really better this cycle,” Appleton- Young said, “and was actually stable until the credit crunch hit in August.”

The subprime mortgage problems and consequent foreclosures, on the other hand, began as early as 2005, she said.

The economist also believes baby boomers will be the first qualified buyers to start buying local real estate again.

“The areas that will take longest to recover are those communities that had an oversupply of new, moderate and lower-end construction and a higher percentage of foreclosures,” Appleton-Young said.

The median price of an existing single-family home in San Luis Obispo County was $527,780 in December, a 1.9 percent decrease from the previous year, according to the association. Sales dropped 41 percent compared with December 2006.

Sales of existing homes in California started dropping in the fourth quarter of 2005. From 2006 to 2007, prices in the state dropped 26 percent. The association predicts prices will decline an additional 9.5 percent in 2008.

The good news is that a decline in prices overall has made housing more affordable, Appleton-Young said. Also, when the federal economic stimulus package is implemented in May, “there will be more capital for housing.”

“These are the signs people are looking for,” she said. “No one will know we’ve hit bottom until six to nine months after it happened. By then, it’ll be long gone.”

—Melanie Cleveland

Heritage Oaks reports record profits in 2007

Heritage Oaks Bank made record profits for 2007, according to its senior vice president, Mitch Massey.

The company earned $6.9 million in 2007, compared with $6.6 million in 2006. The bank’s net income increased 20 percent in the fourth quarter of 2007 to $2 million, compared with $1.6 million in the same quarter of 2006.

Last October, Heritage Oaks Bancorp, the parent company of Heritage Oaks Bank, closed its acquisition of Business First National Bank of Santa Barbara. The bank valued the stock and cash transaction at $20 million. The acquisition brought two bank branches to the Heritage Oaks Bank system, $133 million in deposits and $124 million in loans.

“With excellent asset quality and a well-diversified portfolio of commercial loans, we are continuing to build a strong platform for growth,” said Lawrence P. Ward, president and CEO.

The bank now operates 15 locations in San Luis Obispo and Santa Barbara counties.

—Melanie Cleveland

Tonight, eat, drink and be generous in Paso

Eagle Castle Winery, 309 Anderson Road in Paso Robles, is hosting A Night of Celebrating Love at 7:30 tonight featuring love songs by Jon and Deanna Ramsay, wines, appetizers and a chocolate dessert bar. The cost is $38 per person or $275 for a table of eight.

The winery will donate 10 percent of the night’s proceeds to the Boys & Girls Club of North San Luis Obispo County. For details, contact Rebekah Pogue at 227-1428, ext. 209.

© 2008 San Luis Obispo Tribune and wire service sources. All Rights Reserved.
http://www.sanluisobispo.com



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