North County real estate update: Average home price is $479,000
By Pete Dakin
This is a report on First Quarter Real Estate Activity 2018 in North San Luis Obispo County.
It has been a decade since the severe recession of 2008 and North County has moved forward quite nicely along with the rest of coastal California. In the coming months of May, June, July and August, we will see 40% of the total home sales for this year. The real estate season is open!
Residential single family homes have an average sale price of $479,000 which reflects a robust 11% year over year price increase. Actual sales declined by 15% year over year as the supply of homes continues to shrink at the lower price points. The average days on market dropped down to 42 days from contract to close. There is still a dearth of new construction. More homes will be coming on the market from what I see in our office.
At least once a week a million dollar plus property sells in North County. More million dollar properties will sell in North County than ever before this year. Additionally, we have a number of multi-million dollar deals going on right now. There are a few factors contributing to this luxury home sales uptick. These properties are selling below replacement cost today so the value proposition looks favorable to Buyers. More homes with vineyards are selling. There is still a good selection of quality luxury product available. Luxury product Buyers are more selective and value conscious.
There is more Buyer activity in existing vineyard properties with homes and without homes. There are probably a couple reasons this aforementioned trend is happening. Our County water restrictions have highlighted the value of existing vineyards and historical water usage. Reason number two is that our grape prices remain firm.
The groundwater situation continues to grow arms and legs. Once the government jumped in the control of the basins we most likely will head down a windy road until the dust settles over the next decade. This is not a political statement. We get what we elect. We live in a growing State and people have to eat. The supply issue of water will need to be addressed sooner rather than later.
Currently the hospitality industry is the big story in North County. Paso Robles is leading the entire County in tourism and development for tourism. Wine tasting room sales have been solid. Paso Robles brands continue to expand across the world. This is a slow and steady process but it’s happening.
The spector of higher interest rates hangs over the market but the reality is we still have favorable debt available and we have an economy that is as solid as we have seen since 2008. San Luis Obispo County continues to garner accolades like “the happiest place on earth” and “top places to visit in the world”. Right here, right now. I, for one, remain party fresh.