2015 Real Estate Review

2015 First Quarter North County Real Estate Review 

IMG_5367This is a snapshot of the North County real estate market for the first quarter of 2015. All real estate activity is local. North County remains an inbound market for urban refugees. Therefore, we do evaluate economic activity in our prime feeder markets of the Bay Area and LA to predict the activity that will take place here 3 to 6 months ahead.  This real estate review is designed to help you with your future decisions in our area.

Residential single family home sales are almost identical in number to this sameFront.JPG in 2013 and 2014. The average market price actually dropped a bit to $362,000 this quarter, so the Spring surge that we would begin to see especially Front Doorbeginning in March is not here. In Paso Robles the market is brisk up to $400,000 and much quieter above $600,000. Templeton properties are strong up to $500,000 and Atascadero is pretty active up to $600,000. Lack of inventory is not a factor in our market but may become so as we are seeing many more homes go pending vs. new listings in the past month.

Higher end homes in the million dollar range are active, but a large overhang of inventory is keeping a lid on any upward price push. We see a number of high dollar buyers in our office and they are very selective with regard to location and quality. Price is also a factor at this upper end.

Small business has struggled in the past 6 years and empty office, retail and industrial spaces attest to the weakness. Vacancies are certainly less than they were 4 years ago, but commercial demand remains weaker than expected. Commercial rents have stabilized.

Despite the persistent drought, agriculture has held on nicely. Grape prices look to be solid for this year. Cattle prices are off the charts. The top tier wineries, in quality and production, are doing well.   The wine growers here are thinking outside the box and are creating a genre of wines that are specifically Paso Robles and are wonderful. Paso Robles is known world wide for its wines. That is great for our wine industry, tourism, and the future of this area.

In our market today, the interest rates are less than 4%. Most properties are selling below replacement costs. A majority of sellers have seen their equity return to the degree that they can sell and move on with some cash in their pockets. But many sellers may be choosing to stay put because of an inability to “move up” to more house or a better location. That, as well as higher building and government costs for new construction, may keep an adequate supply of new listings from coming on line this year.

I am often asked about how the drought has affected property values.   Certainly, owners

Salinas Riverbed

Salinas Riverbed

of large undeveloped acreage within the Water Moratorium designation have seen their land values drop. As properties are no longer viable for planting, they have become residential in nature and only useful for dry land farming or cattle as was the common use decades ago. But for residential single family homes, the value seems more to be about jobs and the economy in general than any concern about the drought. After all, a drought, no matter how long, is only temporary. I believe that we all understand that the rain here will return and solve a multitude of issues.

Today in California, despite the need for rain, it’s hard to point to a community and say their future is brighter than ours.   Our best days are well ahead of us.

And “Always Expect the Best”Joanie Williams

 

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The Paso Robles Real Estate Market Today

IMG_5367The Paso Robles Real Estate Market is on track again!  We are seeing inventory getting eaten up this Spring while the sellers are reluctant to list what they own.  With more sales than listings, more demand than supply, the result is that we will see prices increase this season.

Another factor which is helping our market move forward is low interest rates.  However, with these rates down in the low 3% range, what will naturally occur is that home prices will rise.  When money is cheap, more buyers can enter the market and there is more competition for the same properties.  What is interesting is that we had a similar trend in the Spring of 2014 that petered out by Summer.  I believe the difference this year is that our economy is stronger and people are more secure in their jobs today.  I predict that we will see a strong Summer market as well.Spanish Lakes Home

Prices today have increased to a point that is much harder for investors to buy properties that they can buy and flip.  There is simply not enough room to make a profit.  That is good news for first time home buyers who cannot compete with investors paying all cash.

My advice today is “get out of your rental and go buy a house/condo/PUD or any kind of single family residence you can”.  These interest rates won’t last into next year and the price you see today may be higher by Summer.

Atascadero LakeThe Paso Robles Real Estate Market is doing well, despite the drought.  Despite what the politicians are doing about our water situation, we all know it will rain again someday soon.  And when the rain comes back, we will see lots of it!

 

And “Always Expect the Best”Joanie Williams

 

 

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Peanut the Donkey Training Continued

Donkey training all the time!

My donkey, my friend!

Donkey training is not as easy as I thought it would be.  So be forewarned!  I know these critters look pretty simpleminded, but they are really very smart indeed.

“Peanut” is progressing fairly well however, at least in so far as carrying a load of noisy cans and bottles.  But the riding part needs is a bit of a bronc buster!  Although we started out with a good ride the first time, Peanut has not taken well to being ridden since then.  And really the hardest part is the steering.

The Salinas River is an amazing natural resource, not only because our drinking water in this area comes from it, but because it is a wonderful place to hike, walk dogs, ride horses, and as many know but don’t share, ATV’s come in on the weekends and have a great time.  But with all the “traffic” people always seem to leave trash behind.  Not sure why.  My goal is to pick up everything I can out there and hope that people see this place as clean and beautiful again so they won’t continue to leave trash behind.

Donkeys really like to eat much more than they should.  So if you decide to get a donkey, and start donkey training, you’ll need a dry pasture area and not mind much if your trees should disappear over time. They eat everything!

Besides all that, they have lots of personality and they like to let you know what they’re thinking!  Generally they sound like they just lost their best friend, but usually when they talk it means “Come pay attention to me and don’t forget to bring the snacks”!

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2014 Year End Real Estate Review and 2015 Forecast

2014 North County Real Estate Review and 2015 Forecast

NorthEast views in Paso

NorthEast views in Paso

Over the past few decades, North County has transitioned from a sleepy rural farming and ranching town to a dynamic economy, fueled by a number of positive economic factors. We see growth from agriculture, tourism and wineries as well as economic growth from the influx of urban refugees. This report takes a look back at 2014 North County Real Estate and the prospects for 2015.

There was a traditional spring surge in residential home sales, but an increase in pricing that did not reflect the true market. Buyers grew wary of these higher price tags, and as the year played out, sellers adjusted their pricing and buyers became more active.

The average price of a North County home increased over 3% to $346,000 and market sale numbers topped 1000 units. Homes on acreage topped 370 units with an average sale price of $591,000. We sold a total of 1400 homes, the same amount as in 2013, but with a higher average sale price.

The inventory of homes for sale today is about 12% more than this time last year, with a median list price that is about 2% higher. If no more properties come on the market, this inventory could potentially be gone in 3 ½ months. We are close to a very balanced market between buyers and sellers.

For Sale

North County is very dependent on small businesses and they have been struggling here over the past 6 years. The struggling economy has kept a lid on any real growth for them. Commercial real estate investors are seeking income producing properties with good tenants, and others have a greater interest in multi-family properties as this market continues to be strong in income.

Our wine industry is very solid today. We have wineries with international distribution and high quality boutique wineries with solid reputations in the wine world. The water situation and ordinance will restrict planting grapes in the future, so existing vineyards and wineries are more valuable today because of this.

Lower gas prices should really help our tourism industry. New hotels are continuing to be built in anticipation of continued growth in this area. And our “feeder markets” of the Bay Area, the LA Basin and Orange and San Diego counties are showing continued good economic news. This good news will translate over time into more real estate transactions in our area.

There is a cloud of uncertainty that can be felt in our economy, and that unspoken wariness about the future does keep people from making decisions. The stock market is booming because there is nowhere else to put ones money. Therefore, although the future is brightening, it is plodding ahead slowly and cautiously. Real estate is slowly returning to its proper place as a good investment, and the hope is that this trend continues.

Specifically, it’s remarkable that in 2014 North County Real Estate has fared so well. We have always had a business community that is invested in our area’s future and government leaders who do the same. We see only positive growth in many ways this coming year. We are fortunate indeed.

And “Always Expect the Best!”

Joanie Williams

 

 

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Reverse Mortgages May Not Be for Everyone

Vintage Home Paso RoblesRemember, you are spending your childrens’ inheritance when you take out a Reverse Mortgage.  And you just might be creating problems for your children after you are gone, beyond what you had expected.

I recently closed a transaction, wherein both parents had passed away.  A few years ago, they had taken out a Reverse Mortgage on their property.  When it came time to sell, we discovered that after paying closing costs, the family was left with no equity in the house.  And beyond that, the house had to sell as a Short Sale.  The kids had to pay utilities, legal fees, upkeep on the house during the listing AND remove all the personal property from the residence, which in the case of this sale, was a sizable job!

So although the extra cash for Mom and Pop was helpful, I am certain that they believed their children would still inherit the “estate”.  Instead, they inherited a big problem.  Living out of the area, numerous trips for clean up, estate sales, yard sales and trips to the Goodwill.  It added up to a huge task for this family..

The better route might have been careful financial planning on the part of the parents, or even better, selling the house they could no longer afford and purchasing a smaller, less expensive property.  They could have budgeted their cash and left their children a nice little inheritance.  At least they could have left them time to grieve the loss of their parents, rather than having to plunge into a huge additional problem.

The Reverse Mortgage can be a true help for some people, but much family planning should accompany this decision.  Also, beginning in 2015, the lending  requirements for taking out this type of loan has been increased to more stringent financial requirements.  My guess is that too many of these loans are being paid back “short”.  Our residences simply can’t be expected to solve our financial problems in the future.

“Always Expect the Best”Joanie Williams

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2014 3rd Quarter North County Real Estate Review

2014 3rd Quarter North County Real Estate

This report is a look back at North County Real Estate to date. We will review both pricing and sales activity with comparisons on a year to year basis. North County is a dynamic community with a number of factors that influence real estate trends.

Perhaps the most significant statistic for the residential single family home sector is that there are 20% more houses for sale today versus 2013. Early in 2014 Sellers were bullish on pricing and listed properties hit the market based on this optimistic price outlook. By mid-summer it became apparent that the Buyers had a more restrained opinion on pricing.

Morro Road Home

Morro Road House, Atascadero

Actual unit single family home sales remained on par with 2013 and prices did rise almost 8% on a year to year basis. The average North County single family home is now selling at $362,000. After a couple years of double digit percentage price increase the Buyers have decided to take a break. There is no sense of urgency amongst Buyers today, especially with continual low interest rates and a good choice of options when house shopping.

The number of million dollar home sales increased significantly in 2014 but the average sale price did not change on a year to year basis. The number of million dollar property listings dropped a bit on a year to year basis. One could surmise this category is somewhat balanced on these numbers. Buyers are very selective in these purchases and there remains plenty of supply in the pipeline.

40 X 20 shop

40 X 20 Shop, Jardine Road

Commerical properties have steadily recovered over the past few years. Retail and industrial rents are stable and vacancies are slowly being absorbed. This market is not robust but the trend line is positive. Well located properties get all the action while the secondary locations are much less in demand. There are a number of new hotel rooms coming on line in 2014. Multi-family properties have strong rents and investor demand at market prices.

Templeton Ranch

Vineyard on Indian Valley Road, San Miguel

Tourissm and agriculture are the twin towers of our North County economy. The foundation of these two industries is our wine and grape growing business. Despite the drought and world-wide competition for wine sales. North County has held its own and then some. We seem to be like the “Little Engine That Could.” These industries are popular with people that are creative, competitive and above all resilient. There are plenty of places to grow grapes and make wine in the world. It’s the local people in our industry that make this particular place so special.

Real estate investors and farmers are looking to acquire large existing vineyards. Within the industry the participants understand that the drought has created a whole new set of costs and restrictions in regard to planting new vineyards. Investors are also buying existing wineries. These aforementioned Buiyers are well financed and have longer term perspectives.

Salinas Riverbed

Trail riding in the Salinas Riverbed

Has the drought had an impact on real estate in North County? This is a difficult question to answer but I believe the impact of the drought will be more long lasting because of local and state governments are gaining control of the water resource that was previously unrestricted. Government restrictions will have the most adverse financial impact on new development. Existing built and planted properties are better values based on new restrictions and costs that will inevitable be imposed on new development.

Today Buyers lack a sense of urgency which has stalled the nationwide housing recovery. We see the same thing happening in North County. Interest rates are low. Gas is getting cheaper which helps destination locations like North County. When we get a big rainfall this year the party will be on! 2014 shows just how strong North County can in the face of adversity.

 

For more articles and information about our area you can buy my blog at www.joaniewilliams.net and my website is at www.joaniewilliams.com.

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Buy it all Now!

Buy it all Now!          Shop

Buyers often come to me with a wish list. There’s the usual list of size of the house, number of bedrooms, floor plan and of course location. But very often, I am asked to buy a house with a shop, a pool, a horse barn, horse set-up or even an existing vineyard.

And that is what I like to hear. A list of what you really need and want.

However, sometimes a buyer will give me that list and say that they can build it or install it later. Unfortunately, “later” often never comes.

PoolIt is much easier and cheaper to buy a property with what you need all ready there, rather than try to buy the funds later on to install it all. And when you purchase a house with a shop or a pool, you are financing that amenity at a much lower interest than if you had to borrow money to install it yourself. Plus, the price that you are paying for existing amenities today is in general, less than half of what it originally cost to install.

I currently have for sale a house with 2 shops on one acre, 4220 Jardine Road Paso Roblesa house with a shop and a pool on a ½ acre, and a house on 20 acres built above a shop5780 Irongate Rd Creston

Actually, I’m amazed at what you can buy today for far less than replacement value.  The cost of a new nice workshop can range from $80 to $100,000, and to install  a pool can easily cost from $40,000 on up.

So don’t build it, buy it! You will be so glad that you moved in with those amenities in place that might cost you 10’s of thousands in the future.

Always Expect the Best!   Joanie Williams

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The Well Report in a Drought Stricken Land

The Well Report in a Drought Stricken Land

It’s hot out there and it’s really dry. Every buyer purchasing a home with a well should require a well report as part of the inspection or “due diligence” phase of the purchase process.

Most buyers will ask a seller, in the written purchase contract, to provide a “four hour flow test” for potability and productivity. This means that the buyer is asking the seller to pay for a water well drilling company to come to the site and run the well for four hours. The well company installs a meter at the well head.   That meter will measure not only how many gallons per minute the well can pump with the existing pump (the size of the pump and the well shaft diameter can affect the amount of flow) but to measure how Well drilling rigdeep the water in the well was when the test started and how deep the water is at the end of the four hours.

Interpreting a well report is not within the expertise of a real estate agent, and the well drilling company is where all questions should be directed. The buyer should call the company after receiving the report and ask any and all questions about the well in order to help that buyer determine if the existing well will meet their needs now and into the future.

The other part of a well test is the potability. The standard test measures the existence of ecoli bacteria. If no ecoli bacteria are found, then the water is safe to drink. A more detailed analysis of the mineral content of the water can be requested, but the cost of that testing is usually paid for by the buyer.

Well ReportEven in the current drought, most wells are still providing enough water for a buyers’ general use. However, the well report should be considered an absolute MUST before purchasing a home not only in Central California where the drought is currently very severe, but anywhere in the country.

The well drilling company is a wealth of information and their service to the buying community is invaluable.

Always Expect the Best, but do your homework!           Joanie Williams

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Why Do I Need a Real Estate Agent?

“Why do I Need a Real Estate Agent?”

With the advent of the internet, looking for a home to buy has become way easier for buyers.   But there are so many more reasons that a buyer still needs the services of an agent.  Here is a short, very important list.

Why Do I Need a Real Estate Agent

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125 Years Old and Counting – El Paso de Robles

El Paso de Robles, or Paso, as the locals call it, has always been proud of her heritage.  This Spanish land grant of approximately 26,000 acres was purchased by Daniel and James Blackburn and a partner for $8,000 in the mid 1800’s.  This

Downtown charm

Downtown charm

was a place full of oaks, natural hot springs, cattle grazing land, and the Salinas River running through it all.  Three years after the Civil War, Drury James (uncle to Jesse James) purchased a half interest in the town.

In 1900 the main settlement was the town of San Miguel where the San Miguel Mission is located.  That is where the train stopped and the farmers would bring their harvested winter wheat and barley for shipment.  But when a sustained drought occurred in the early 1900’s, the town declined and because Paso Robles had the hot springs and a hotel for travelers on their way to San Francisco, it grew in popularity.

There is no Main Street in Paso.  Our Main Street is Spring Street because this is the location where hot springs once bubbled unchecked out of the ground.  It’s pretty, clear, blue green water,  about 120 degrees and smells like rotten eggs.  One life long resident of Paso said that the town always smelled like sulfur.  Eventually the hot springs were all capped, and the smell disappeared.

Spring appearance after the 2003 earthquake

Spring appearance after the 2003 earthquake

Although grape growing had taken place in this area since the Padres planted them around Mission San Miguel, they did not become part of the agricultural landscape until the 1980’s.  When vintners realized that the hot days and cool nights were perfect for many red varietals, the landscape around Paso began to change dramatically.  As the grapes came, so did the wineries, the restaurants, the tourists, the hotels and the money to change a small farming and ranching community into a tourist destination worthy to be featured in magazines worldwide.

Still small enough to be friendly and inviting, this City of about 31,000 residents is full of fun.  From a simple drive through the lovely landscapes, to wine tasting, car shows, art studios, shopping and amazing restaurants, there is something here for everyone.  We even have world class golf course  and a water park!

Oaks and sky

Oaks and sky

And only 30 minutes will get you to San Luis Obispo (a wonderful destination in itself) or the Pacific Ocean.

There’s so much to see and do here that I have to continually update my list of Community Resources.  So make sure and check there for new listings of recommended places to go and things to do.

Happy Hunting!  Joanie Williams

Call me anytime for more information!  805-674-1968

 

 

 

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