The areas that I frequently blog about, and more specifically today the real estate current trends, are all along the 101 corridor. This area is north of San Luis Obispo and runs up to just north of San Miguel. All of the cities lie along this corridor and the intersection of Hwy 46 both east and west. My blogging about real estate is very localized to this area and this economy.
The local economy along with consumer sentiment has a great deal to do with what a buyer or seller decides to do. Since 2008, that consumer sentiment is now at it’s highest point. So consumers are mentally coming out of the recession even if all economic indicators are not there yet. So that’s good news.
The bad news, however, is that the ups and downs of a market, real estate, stocks, vegetables…..anything…..is so very dependent on how the consumer FEELS about what is going on or might be going on in the future. And even though “housing” is an absolute need, the purchase of housing is not. It is very dependent on peoples feeling that this is or is not a good time to buy.’
So having said that, when I talk about real estate current trends, they can change on a dime, and in this case, on the rise in interest rates. We have recently seen a slow down in activity since the rates have come back into the mid 4 range. Houses are staying on the market a bit longer, and buyer activity has slowed down a bit in the past 6 weeks.
That is not to say that this is no longer a great market. It still is. Home prices are still amazing, but inventory is increasing a bit which will ultimately give buyers a few more choices. Price appreciation will slow a bit this 2nd half of the year, as opposed to the appreciation we saw last year. We currently have 266 stick built houses available in North County. That is just slightly less than 3 months of inventory. In a well balanced market, we should see 5 to 6 months of inventory.
When you sell real estate as a full time job, show up in the office every day, meet with buyers and sellers regularly, it’s sometimes hard to gauge the real estate current trends. It’s like being in the middle of the race and you’re not sure what your time is or how much longer you’ve got to go. If I could see myself, or the marketplace, from the view of a helicopter, it would be much easier.
So my thoughts may only be worth that penny in your pocket. Today, I see a market in transition. I see fewer bank owned properties coming on the market and fewer short sales. I see sellers who now have enough equity in their home, that they are willing to sell at the current prices, even if it means that they lost some of their equity in the recession. I see buyers who are cautiously making offers in all categories of price ranges if they can make it work financially, and they can buy what they are looking for. And I think I see a rise in inventory over the next 12 months, and a healthy market during that time as interest rates hold or even rise a bit more. If they will stay under 5%, we can keep America moving…. and moving forward!