2017 North County Real Estate Review and Forecast
This is a look back at North County Real Estate in 2017 and some thoughts on the coming year. It’s a privilege to live and work in such a desirable community.
Unit sales for in town homes topped 900 properties for the second year in a row. The average sale price of residential single family homes in North County was $457,000 which reflects a 6% increase over 2016. Homes priced under $500,000 are by far the strongest market in our community. We still have historically low inventory and new home construction is minimal. Consistent demand coupled with lower supply is where we are heading in 2018.
Homes on acreage really jumped in price to an average sale price of $742,000 which reflects a strong 12% year to year increase. These properties had been lagging a bit but pricing is catching up. Atascadero and Templeton homes on acreage led the way. Million dollar homes also got some traction in 2017. The number of million dollar sales jumped up to 54 units from 38 in 2016. There is still a year and a half of inventory in this category but we did move forward. Million dollar homes are still selling for well below replacement value.
Our rental market is still strong with little vacancy. However, there are close to 200 apartment units being built in North County in 2018. Also, we are beginning to see more infill residential construction throughout the area. If lending conditions remain favorable, we should see a significant increase in new construction by 2019.
The Wine Industry continues to drive a hospitality and entertainment industry that is actively accelerating. There are many new hotels and restaurants planned and under construction. Paso Robles is the focal point of most of this economic activity. Wine grape prices are solid and producing vineyard prices are firm. Even though millennials are a quarter of the population these young people consume 42% of the wine product in the U.S.
Commercial real estate has been consistent. Retail is a little spotty with internet sales so strong. Financial industries like banks are growing. Office space is stable. Industrial is still driven by user demand but the Wine Industry is providing demand for storage, crush locations, etc. Multi-family sells quickly if lit is priced right.
Conversations about the real estate bubble have been replaced by the Tax Reform situation. There is always the next ‘woe is me’ current event for the media to blow out of proportion. Tax Reform will likely prove helpful for a majority of the people in our Country, but tough for others. No law has ever or will be passed which is a win for 100% of the people.
We have lived for eight years with little growth and Real Estate has been driven by cheap interest rates. Now the government is trying to replace a transfer of wealth economy into a growth economy. So let’s see what happens. Whatever happens, we will compete.
North County is thriving for many reasons. We have a wealth of natural beauty and ideal weather. Our local government helps our community compete and grow. We have wonderful community leadership and citizen participation. Individuals have invested large sums of money into our Ag and Hospitality Industries. We have a wonderful new Regional
Airport and strong economic activity in our Medical community. All three North County communities continue to improve in liveablity. There are many reasons to see that the North County will continue to thrive