2013 North County First Quarter Real Estate Update
The North County real estate market has both clarity and liquidity and this real estate update is provided to help you understand what is happening in our market today. Property values are well defined and home sales are brisk. We still have short sales and foreclosures but the drag on pricing seems to be nearing an end. Appraisal and lending difficulties still exist but these vendors are becoming more realistic. This is a review of where we stand today.
The number of single family home sales in the first quarter of 2013 was the same as the number of sales in the first quarter of 2012. We had 209 residential homes sell in the first quarter with an average sale price of $305,000 as compared to an average price of $245,000 in 2012. Year to year that’s a 24% increase in pricing.
Perhaps the biggest reason for the price jump is the lack of inventory. Today there are 172 homes for sale in North County versus the supply one year ago of 298 homes. That’s a 42% drop in homes available for sale. Do not look for new home construction to fill this void any time soon. More ‘real’ sellers will list their homes for sale as time goes on, and it will be a seller’s market in residential single family homes for this season. More homes would sell if they were available. Liquidity is nice for an asset that is somewhat illiquid.
Million dollar properties have a different story all together. In 2012 there were 58 million dollar properties for sale and today there are 76 million dollar properties for sale. That’s a 31% increase in supply of million dollar properties. Sales for the first quarter were again identical to 2012 at 3 units. The average sales price was identical. Our office does the majority of these sales and we are seeing many more prospective buyers today. This supply situation will keep a lid on any upward price mobility. However, more supply means more choices for buyers. In such a discretionary market price and quality dominate the discussion. Prices are defined and stable in this market for today.
The real estate update on our commercial market reflects the tepid economic conditions in our state. Vacant spaces are everywhere. Tenants come and tenants go. Rents are soft unless the location is A plus. Until this older space absorbs there will be weakness in this market.
Vineyard ground is in demand. The buyers are very selective and there are few properties that fit their profile on the market today. Grape prices are strong and Cabernet is very strong. Big well established Paso Robles wineries are doing good business. There are some significant high dollar investments taking place in the wine industry in North County. This wine industry drives our tourism business which is also strong today.
Traditionally real estate markets are driven by economic growth and job growth. We have no economic growth and the biggest boost in job growth happens when people stop looking for jobs. Health care costs are exploding and taxes are rising. The only thing cheap is money and that is artificial. This is not the same recovery in the economy that our parents saw. So why real estate?
We are at the point where people just want to protect their assets. Real estate is favorably priced so investors and buyers who have been on the sideline are stepping up to make their move. Many foreign investors are buying million dollar properties in Los Angeles and the Bay Area. And those sales continue to drive our market.
North County is well positioned because that wealth eventually moves into our area. This is an amazing place to live for both it’s quality of life and it’s beauty. Buyers here are constantly reminded by those they leave behind how very fortunate they are! I hope this real estate update has been helpful to you.
For more specific help with real estate in our local market, call, email or text me!
“Always Expect the Best”
For local real estate help, call me at 805-674-1968