Home buying demand has been fierce in North County since June 2020. San Luis Obispo County is experiencing a generational shift in Real Estate demand and activity. A seemingly perfect storm of low-interest rates, remote workplace options, deteriorating urban environments, and the high cost of city living have created an exodus of urban refugees seeking a higher quality of life and a lower cost of housing. North County is in the right place at the right time to service this increased buyer demand.

Our 2020 year started out strong but dipped sharply with COVID in early Spring. Once our markets opened back, and real estate was categorized as an “essential business” we have seen very strong demand and supply limitations. Sellers are reluctant to list a property with the COVID virus still working its way through our County, and unless a seller is leaving the State, there very few reasons to leave this County. The median price will finish the year at $575,000 versus $505,000 in 2019. That’s a 15% increase, year to year, and is similar to what many communities experienced statewide.

There were 340 available homes for purchase a year ago versus 194 available today. It’s the strongest seller’s market in decades. The actual number of sold homes rose 7% year to year. More homes would sell if more homes were available.

Ranch properties and Vineyards have enjoyed an increase in demand but supply still is ample in these categories. Grape prices rebounded a bit as smoke taint from the North Coast caused the bulk market inventory to be depleted. There is good value in these larger offerings for buyers.

In Commercial properties, multi-family and rental homes are still in strong demand. Downtown retail and hospitality properties are dormant for health reasons but the vacation rental market is still strong even with the many shutdowns from Sacramento.

Our City leaders in Paso Robles have managed outside elements of chaos and COVID challenges with calm, clarity, and gracious leadership. We have something good in North County. Our police and fire personnel are awesome. Safety is a number one quality of life issue, and we have safety.

January is beginning strong in 2021 and we are expecting this year to continue the uphill pace fueled by record low-interest rates, low housing supply, and new work from home policies. Fully 1/3 of homebuyers surveyed said that they would move if their remote working situation continued once the pandemic is brought under control. And if COVID does recede from controlling our daily lives, our national economy is expected to expand 3% in 2021.

North County is a citizen governed community that will continue to face many challenges in the future. However, we have a wine industry and hospitality industry that is world-class. Politically and financially our community has stood tall as many have failed. We have natural resources that are rich and accessible. We will see strong buyer demand in this first half of 2021. This is an optimum time for sellers.

Call me today if I can assist you, your family or friends with your real estate needs.

Happy Trails in 2021!

P.S. Call me anytime for advice if you are remodeling, adding solar, or thinking of making major changes to your home. I am happy to give advice to ensure that you will receive the biggest Bang for your Buck! Kitchens are a big attention grabber i.e. extra storage and newer cabinetry is hugely popular. Also, garage space has become increasingly important for storage and as possible personal gym areas. And cleanliness has increased in importance for most buyers. This industry changes often so make sure you have the latest info from me and all of my partners at RE/MAX Parkside Real Estate

2020 2nd Quarter North San Luis Obispo County

Real Estate Review

The market returns!  At the beginning of the year, our market was on the same trajectory path as 2018 and 2019.  Meaning, listings, sales, and pending transactions were on the same upswing as well as some price appreciation due to low inventory.  March and April took a dive do to Covid-19.  The real estate community, nationwide, was unable to show homes because of the “shelter in place” orders and yet some existing sales marched ahead and closed under these extraordinary circumstances.

In some instances, houses sold from just the virtual tours online.  Despite a worldwide pandemic, people still have reasons to move.  So the real estate industry was thankfully labeled “essential” and we went back to work with restrictions of masks, gloves, booties and later on hand sanitizers and disinfecting guidelines. 

March and April gave way to a May wherein restrictions on many business began to be lifted.  The real estate market has been gaining speed ever since and as we are returning to a more “normal” way of life, business is taking off again.  There is pent up demand for housing and sellers are currently less concerned about buyers entering their homes.  Especially now that all buyers and their agents are required to wear masks. 

Our local market has always followed the LA and San Francisco real estate market activity.  And Southern California activity rebounded after its’ worst April on record.   Low mortgage rates, and pent up demand are fueling the upswing.  And combined with that, many are recognizing the need for a larger home so they can continue to work from home in the future. 

Our “Spring” buyers are now our “Summer” buyers.  I am seeing houses sell that never reach the open market because of the relationships that agents have with their basket of clients.  We are seeing multiple offers on well priced inventory.  But it could be months before we see the long term affect that the pandemic has had on real estate. 

Yes, these continue to be uncertain times.  The movement to eliminate racial and social injustice is extremely important, but the violence that has accompanied it leaves people hesitant to know what to do next.  We have come a long way towards the return of our local real estate market but we need the world economy to recover as well.  Every market is now subject to worldwide economic, political, social and health changes. 

But we live in a place that is desired by many.  Rural, spacious, convenient to beaches and big cites, safe (thanks to our amazing police and sheriff departments), and full of amazing recreational opportunities.  This area will continue to outpace many other places in California because it is such an attractive place to live. 

Normally, I have more statistics for your use in this report, but for now, know that the real estate market (along with every other industry in our country) took a major dive (why focus on that?)  and is now on a positive upswing.   Let’s be grateful for all we have been given in this blessed place. 

“Always Expect the Best!”

March 24, 2020

Real Estate Market Update North County Real Estate

The real estate world before Covid-19 looked very good.  Inventory was low and as we approached Spring, many sellers were getting ready to list.  We had an increased number of buyers shopping earlier than we normally see, and I believe this was a function of low interest rates, increased demand for those who want to live in this area, and the desire for many to jump into a home here before the prices jumped even higher.  Our first 2 ½ months of this year, both here and in the State were very active.

At the end of February this year, single family homes were on the market for an average of 38 days, and our County had 4.8 months of inventory available…a sellers market.  The median list price for a North County home was $435,600.

With the strong economic growth we have been experiencing, low mortgage rates and more millennials entering their peak age for home buying, we now have more buyers looking for a home than at any time in the past five years.  In fact, January 2020 was the strongest January for purchase mortgage applications in 11 years!

Last Thursday March 19 we were urged by the Governor to cease any property showings or face to face meeting with clients.

The California Association of Realtors (CAR) Today is working with the Governor’s office to have Real Estate classified as an essential service so we can continue to show houses and list properties.

It’s likely too soon to issue any real statistics to show you what is happening, but with the Shelter in Place order, and the stock market declines, most of us expect this situation to some degree to negatively affect our business.  But Sellers still want to sell.  And as effective as a video tour can be, it will never replace walking through a house in person.  And Buyers, who see amazing interest rates under 3%, are even more interested in purchasing a home. However, with low inventory and an inability to see inside a home we are seeing fewer sales.  While the 10 year Treasury may continue to drop, an accompanying drop of the 30 year fixed rate mortgage may not drop in concert with that.  The prediction is that actual rates for the second half of the year will be in the 3.2 to 3.5% range. 

Today, lenders are flooded with refinance requests.  I know of some companies who are not accepting any more refis until they have worked through applications on hand.  Let me know if you need a referral to someone who can help you right now.

On the positive side, we are seeing existing sales still moving forward, even if the appraisal has not yet occurred.  The federal government guidelines have been loosened to allow appraisers to conduct a “drive by” or external only appraisals.  This will be a huge help to our industry in the coming weeks.

The title and escrow companies are continuing to close transactions.  One escrow officer told me today that although the office door is locked, they are allowing in one client at a time by appointment for signing and notarization of all necessary documents.

Currently CAR expects negative economic growth in this next quarter, and state that in fact, we are in the midst of a recession all ready.  The slow down and it’s length is largely dependent on how long the virus lasts, and if the economy can get a “re-start” quickly enough.

In the meantime, I came across this website for all things Corona Virus.  Lots of great links for real and up to date information as well as ideas for keeping you from going crazy as you “Shelter at Home”.   For instance, there’s a link to “Every Oscar Best Picture Ever”. 

https://medium.com/@racorvese/covid-19-resources-for-adults-384f115e44db

How can I best counsel you today?  First of all, please know that we are positioned to bounce back in todays market. 

It may be that as a seller you will need to expect a longer marketing time as markets readjust.  But know that you have not missed the window of opportunity.  Although the homebuying season started early this year, it is statistically known that homes listed in May generally sell for more than other times of the year.

And as a buyer, inventory will be low until sellers once again feel comfortable enough to allow showings.  Also, we need to remember that your job security is tantamount to obtaining a loan.  You may be either be job hunting or in a position where you job security is tenuous.  But remember that our interest rates this year are expected to remain in the low 3% range.

Will the price of homes change?  Does the drop in the value of the stock market signal an accompanying drop in the prices of homes?  During the past recession, when the S&P dropped 51% between 2007 and 2009, real estate prices dropped 18.6%.   So no, there is not a direct correlation.  A recession does not equal a housing crisis.

This change in our economy is closer to a 9/11 event than to the downturn from a recession.  9/11 produced fear, anxiety and shock in our markets.  But in the three years following the 9/11 crash, homes continued to appreciate at a healthy rate.  Think of it more as what happens in any part of the country that experiences a long, heavy snowstorm.  Everything has to pause.

I feel that when the country begins to function normally again, the real estate market will come roaring back because of pent up demand.  Goldman Sachs predicts a GDP of -5% in our 2^nd quarter, a +3% in the 3^rd quarter, and a +4% GDP in the 4^th quarter.  Beyond that, they predict even further strong gains in early 2021.

FHA is enacting an immediate foreclosure and eviction moratorium for single family homeowners for FHA insured mortgages for the next 60 days.  This is a wonderful move by our government to help alleviate concerns for those homeowners living from paycheck to paycheck.   We didn’t have this help back in 2008  Also, our homeowners learned something from the Great Recession and  the amount of equity pulled from homes today is ¼ of what it was at the time of the Great Recession.  Most people have learned that it’s a bad idea to use your home as an ATM, so financially, our country is stronger than it was 15 years ago.

Owning a home is the number one way that households without inherited wealth, gain wealth.

Affordability will continue to be a challenge, but the mortgage rate environment will be really positive.  We live in a highly desirable area and the problems that the large cities have experienced in the past weeks have been felt here to a much lesser degree.  People will be moving here this year.  We have much to be thankful for! 

I am grateful to be in this ever changing, ever challenging business and to have my clients as my friends.  And I’m also grateful that as far as I know, Covid-19 has not affected the health of any of you.  So stay healthy, be careful and please let me know if I can answer any real estate questions for you in the future!  My phone is always ON!