North County real estate update: Sales decline reflects shelter-in-place policies
By Pete Dakin
This is a report on the Second Quarter Real Estate activity for 2020 in North San Luis Obispo County.
–There were 305 2nd-quarter sales in 2020 compared to 430 2nd-quarter sales in 2019. This sales decline of 29-percent reflects the Shelter In Place policies enacted this Spring. Interestingly the median price for the 2nd quarter of 2020 and the 2nd quarter of 2019 was stable at $510,000. Buying activity has been brisk as COVID restrictions have been relaxed.
Inventory has not kept pace with buyer interest. New listings are down 23-percent from the 2nd quarter of 2019. The pandemic situation has created a layer of uncertainty regarding the physical aspect of buyers touring homes for sale. Safety guidelines have been put in place for our industry to accommodate buyers looking at property. Some properties are going into contract before buyers have physically toured the property.
Higher-priced estates and ranches are back in vogue. Urban refugees are looking for rural properties with open space and less density. Also, there is more interest in lake properties. We have transitioned from “walkability” to panoramic social distancing. North County is well-positioned with the type of properties urban refugees are considering today.
The hospitality industry has been hammered by government restrictions. Our wine industry has experienced uneven effects of COVID. Wineries with strong distribution and strong wine clubs are holding their own. Tourism dependent tasting rooms are struggling. Winegrapes appear to be long in supply this year which will have a softening effect on pricing for uncontracted fruit. There is still action on vineyards for sale but the price has to be right.
Interest rates are at historical lows. As a first-time homebuyer, you have access to fixed long-term debt that is extraordinary. As an investor low-cost debt and a strong rental market equals opportunity. In chaos there is opportunity.
These are some suggestions to consider from a seller and a buyer perspective in this market. As a seller, you should get your due diligence inspections done before your home hits the active market. These inspections may include a home inspection, termite report, well test, and septic inspection. Getting these reports done in a safe and timely manner today can be a bit of a hairdo.
Government restrictions are always changing and every time someone enters a home there are requirements of some form. We do extensive video and photos upfront to help buyers prequalify the property. We can then explode into the marketplace with a full package that broadcasts worldwide. These suggestions are especially important with rentals and VRBO.
North County is in the right place at the right time. Low inventory and growing demand make the market a challenge for buyers to compete and an opportunistic moment for sellers. North County is a great cost value proposition for those urban refugees fleeing big cities. Low-interest rates sweeten the pot for buyers and sellers.
Pete Dakin is with RE/MAX Parkside, a market leader for North County with over 20 years of experience. Fred Bruen, a RE/MAX agent is a co-writer and in-house analyst.