Paso Robles real estate sees strongest seller’s market since post World War II
Sale prices higher than ever in North County
–This report is a look back at 2021 North County Real Estate and provides a window into the First Quarter of 2022. Diving deeper into 2022 is a bit problematic with the myriad of economic, political, and health issues we are dealing with in today’s world.
Buyers are actively searching for North County property today. The buying pool may be shallower than a year ago but there is strong buyer demand today. This buyer demand for product spans all noncommercial properties including homes, acreage, ranches, and vineyards. With low-interest rates and historically low inventory levels, it remains an optimum seller’s market.
Simply put this is the strongest seller’s market since post World War II. Sale prices are stronger than ever before in North County.
The total number of homes sold in 2021, 1,683 units, represents an increase of 7% over 2020.
However, the number of sales in the fourth quarter of 2021 dropped by 73 units, versus the fourth quarter of 2020. Listings for sale plunged in the fourth quarter to the point that there were only 10 available homes for sale in Paso Robles near year-end.
The median sale price surged to $629,000 year over year with the fourth quarter median price hitting $660,000. We do not see prices going down in the coming months.
In our office, we are seeing many more people making plans to sell their homes. These sellers should be successful and achieve strong prices.
As interest rates rise more sellers will likely venture onto the market to take advantage of strong prices. Inflation looks to explode in the first quarter which may alter demand among buyers. Some buyers may want to secure a great inflation hedge whereas other buyers may back away due to rising expenses. Add in COVID and it’s a bit of a crapshoot after the first quarter.
Rental rates are predicted to rise by 7% which reflects the lack of new construction and available homes for sale. The residential single-family home is becoming a luxury item.
Adding to the confusion is the continuation of the Great Reshuffling Migration that began with COVID in 2020. When faced with the pandemic people started to operate with a sense of urgency. Many people are retiring earlier and moving to more affordable areas. Remote work has expanded housing options. The political divide has prompted more people to seek out living with other like-minded people. An uptick in crime and progressive educational reform has spurred more population movement.
Fruit prices are strong and demand for vineyard and winery properties is solid. Agricultural properties tend to dance to their own music and are much more stable than housing prices. Low-interest rates and planting restrictions have provided a strong foundation for wine grape properties.
Operating expenses are rising and labor is always an issue. The reputation of our area for quality wines and fruit continues to rise.
One could argue that North County is an optimum place to own real estate in California. Our two primary feeder markets are the Bay Area and Southern California.
Those areas are still significantly more expensive and less desirable to live in on a day-to-day basis than North County. North County people usually migrate out of state. These sellers are replaced by the urban refugees buying homes and a lifestyle that is cheaper and nicer.
–By Pete Dakin and Fred Bruen
RE/MAX Parkside Real Estate