2016 Third Quarter North County Real Estate Review
This is a Real Estate Review for our North San Luis Obispo County real estate. All real estate is local. We hear lots of news in the media, but it’s what happens here that affects your decision making. It’s what really matters to you.
Residential single family home sales were even in volume with 2015 and prices rose 5% to an average sale price of $396,000. Homes on acreage were also even in volume with 2015 and the average sale price of $653,000 reflected a similar 5% increase over the comparable 2015 period. The number of homes for sale dropped 7% as inventory is down to about 3 months.
Where are the Sellers? They continue to sit on the sidelines and watch the game. Many still cannot sell for what they believe their home is worth. It may be quite some time before we see 2006 pricing again. We also have fewer “move up” buyers as our large Baby Boomer population is aging and choosing smaller homes. Downsizing has become very popular.
Million dollar home sales increased a bit over 2015 and average sale pricing actually increased 4% year over year. Million dollar homes for sale increased 24% in 2016 over 2015. This market has been selective and less robust throughout the recovery. Demand has been consistent but supply is way ahead of absorption.
Vineyards and homes with vineyards are finally seeing some consistent action. The water ordinance has stopped all Eastside planting. Slowly growers and investors are realizing that the only way to be in the Grape Business is to by existing vineyards. Most grape varietals are firm in pricing which is an added bonus. Buyers of vineyards today are protected from an increase in supply by the ordinance.
Commercial properties are in the best position since 2008. Vacancies still exist but there is a lot more actual user activity at this time. Tourism is super strong and growing. Apartments are in demand by tenants and investors. Financing is still a challenge across the board.
Home prices may be entering a plateau phase. There is an inverse relationship between interest rates and asset prices such as homes. It seems that interest rates have found a bottom and in fact expectations seem to be in minor rate increases. Residential rates seem to have stabilized
North County has risen to the challenge of competing in a no growth economy. Our city government works. The wine industry has created an environment that attracts high quality consistent tourism dollars. Every weekend it seems we are celebrating life! Perhaps our greatest asset is the community spirit inherent in our citizens. We have a healthy respect for our past and generous attention to our future. Who has it better than we do? Nobody!