Last week in real estate is the weekly notice for what happened in the San Luis Obispo real estate market as interpreted by Dominic Tartaglia of Tartaglia Realty.
This week I want to address our county-wide market but not without giving you the weekly snapshot of single family homes in San Luis Obispo from this past week. From last Monday 09/09/13 to today the market was fairly slow with just 4 new listings, 3 Pending listings and 7 Sold listings. Median prices for each category in order were $578,000, $649,000 and $575,000 for a total average of $589,857 for last weeks real estate movement. The average Days On Market (DOM) dipped down to 29 from last month’s average of 45 suggesting that there are still plenty of buyers in the game looking for a good price and interest rate yet our inventory is tightening up. If you will remember back to last weeks article I mentioned that we are in a time period of significance in relation to what the effect the Feds will have on mortgage rates; so far nothing significant has happened but we did see a slight relief on the 30 year fixed rate conventional loans with an ever so slight decrease back down to 4.75%, down .125% from last week.
In the coming month or two I expect that we will continue to see a diminished amount of inventory of existing homes and hope to see a few more new construction units introduced to the market by the way of Serra Meadows and Moylan Terrace. In looking at the historical data we see that the real estate supply cycle for the time of September through January has a negative correlation, as we get closer to January inventory decreases each month. That being said, in looking at San Luis Obispo and SLO County we have seen a diminishing supply of “New Inventory” since July but are still seeing increasing numbers of “For Sale” homes. That suggests to me that there is some hesitance from buyers to pay for the higher priced listings and the higher priced listings are still on the market while the more affordable homes are selling quickly (hence the avg. DOM of 29). As the number of New Listings decreases I would expect the number of For Sale homes to follow in that trend. If you are considering selling your home in this market, with a fair price; this is a good market to sell in because buyers are looking for value. I used to see buyers looking for bargains for investment purchases but today my sense is that buyers are buying for personal use now as opposed to investment previously.
Now let’s talk about the county. Q3 of 2013 saw a slight increase of Sold inventory from the previous year and a significant increase in the number of New Listings in the county, up 16.5%. That being said, inventory county-wide was still down nearly 6% from Q3 in ’12 with an increase in median home prices county-wide of 16%. Even more interesting to me was the statistic posted by the California Association of Realtor®s that our county’s sold homes were comprised of 90.9% equity sales in July. That means that 9.1% of the homes sold in July were distress sales. This is a huge swing from years prior where most of the inventory county-wide was distressed in some capacity. If we compare those numbers to Los Angeles County we see that LA County had 83% equity sales and 16.9% of homes sold in January under distress. Statewide, only 82% of home sales in July were equity sales. San Luis Obispo County is making a strong recovery and is ahead of the state in clearing out our distressed inventory and has turned the corner and is stabilizing well ahead of other counties.
Despite posting strong numbers San Luis Obispo County still ranks at 13th in the state according the California Association of Realtors. The CAR bases their ranking system on a variety of metrics which includes median home price which can offset other shortfalls in other counties. For example, Marin County is ranked second in the state yet its DOM is approximately 40 days as opposed to SLO County at 29 but it’s median home price is $1,000,000. For San Luis Obispo County to be 13th out of 41 counties, it’s safe to say that we are doing well. Putting all of this together, I think of a SCUBA diving concept known as the slack tide. A slack tide is the point at which water in a bay is calm, it’s not rushing in to fill the bay and it isn’t emptying out of the bay back to the open sea. That is the optimal time do dive in a bay because the water is clear, it isn’t moving erratically and you have less of a risk of being taken out to see.
I see our market at that point today. It’s safe to play and get into the market and buy or sell investment property as well as property for a personal residence without getting taken out to sea. Right now the market is pretty transparent and has a trend that is currently suggesting two things without question. First that prices are appreciating and secondly that inventory is at a slight shortage. Granted, each person and each transaction has individual circumstances that may differ from this article but I would be glad to consider your particular instance should you or somebody you know be considering making a move.