Sale prices higher than ever in North County
–This report is a look back at North County real estate in 2021 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 facing us. face in today’s world. .
Buyers are actively looking for property in North County today. The pool of buyers may be shallower than a year ago, but buyer demand is strong today. This buyer demand for the product covers all non-commercial properties including homes, land, ranches and vineyards. With low interest rates and historically low inventory levels, there remains an optimal seller’s market.
Simply put, this is the strongest seller’s market since post-WWII. Selling prices are higher than ever in North County.
The total number of homes sold in 2021, 1,683 units, represents a 7% increase from 2020.
However, the number of sales in the fourth quarter of 2021 fell by 73 units, compared to the fourth quarter of 2020. Listings for sale fell in the fourth quarter to the point that there were only 10 homes available for sale at Paso Robles near year- end.
The median selling price jumped to $629,000 year over year, with the fourth quarter median price hitting $660,000. We do not expect prices to drop in the coming months.
In our office, we see many more people who are considering selling their homes. These sellers should succeed and achieve high prices.
As interest rates rise, more sellers are likely to venture into the market to take advantage of high prices. Inflation seems to explode in the first quarter, which could alter buyer demand. Some buyers may want to secure excellent inflation coverage while other buyers may back out due to increased expenses. Add in COVID and it’s a bit of a dice roll after the first trimester.
Rental rates are expected to increase by 7%, reflecting the lack of new construction and homes available for sale. The residential single-family home becomes a luxury item.
Adding to the confusion is the continuation of the great redesign migration that began with COVID in 2020. In the face of the pandemic, people began to operate with a sense of urgency. Many people are retiring earlier and moving to more affordable neighborhoods. Remote work has expanded housing options. The political divide has prompted more people to seek to live with other like-minded people. An increase in crime and gradual education reform spurred more population movement.
Fruit prices are high and demand for wine and vineyard properties is strong. Farm properties tend to dance to their own music and are much more stable than house prices. Low interest rates and planting restrictions provided a solid foundation for wine grape properties.
Operating costs are increasing and labor is still an issue. The reputation of our region for its quality wines and fruits continues to grow.
You could say that North County is an optimal place to own real estate in California. Our two main food markets are the Bay Area and Southern California.
These areas are still much more expensive and less pleasant to live in on a day-to-day basis than North County. North County residents generally migrate out of state. These sellers are replaced by urban refugees who buy cheaper and more pleasant houses and a way of life.
–By Pete Dakin and Fred Bruen
RE/MAX Parkside Real Estate