OCTOBER 2024: HOUSING MARKET REPORT

San Luis Obispo County Housing Market Trends

The Central Coast of California continues it's trend as one of the most desirable real estate markets in the Golden State, offering the lifestyle, landscapes, and the variety of homes and ranches many seek.

As we enter the fall season of home buying and selling, the real estate market in San Luis Obispo County is seeing some notable shifts, with a mix of seasonal trends and long-term adjustments continuing to shape the landscape for both buyers and sellers. We will discuss factors affecting the market here in San Luis Obispo, including inventory trends, home values, buyer demand and mortgage rates.

Whether you're a homeowner, a potential seller, or someone looking to buy, understanding the current market dynamics is essential for making informed decisions.

Overview of the Market

Throughout October, the San Luis Obispo County housing market has remained relatively balanced, with a slight decrease in overall activity compared to the peak spring months. The number of new listings has decreased slightly, as expected for this time of year, but there is still a steady flow of properties being added to the market. The key trends in the market at this point include longer days on market, a modest decline in sold price-to-list price ratios, and an overall stabilization of home prices after a few months of slight fluctuations.

"Buyers waiting on the sidelines could find that early fall presents a “sweet spot,” where there’s less competition from other buyers, more motivated sellers and lower interest rates to finance their purchases." -Zillow.com

Days on Market & Inventory

The average days on market (DOM) in San Luis Obispo County has increased slightly in recent months, reflecting a more cautious approach from buyers. Homes that were once selling quickly due to pent-up demand and low interest rates are now taking a bit longer to find the right buyer. As of October, the average DOM is hovering around 30-35 days, compared to 20-25 days earlier in the year. This shift suggests that buyers are taking more time to make decisions and weigh options, potentially due to higher interest rates and a broader economic uncertainty.

However, inventory levels remain lower than normal, which continues to limit buyer options. For SLO County, we currently have 599 residential homes for sale, which is down about 40% from historical numbers for years prior to 2020. As of October, the inventory of homes for sale is still down about 10% year-over-year, keeping competition relatively tight for well-priced properties, particularly in desirable areas.

Closed sale volume is lower, with 212 homes selling in the last 30 days.

Price Trends and Sold Price-to-List Price Ratio

The median home price in San Luis Obispo County is showing signs of stabilization, with prices either holding steady or experiencing slight declines in certain areas. For example, homes in rural or more remote areas may be seeing small price corrections, while properties in prime locations like downtown San Luis Obispo and coastal communities continue to hold their value.

The sold price-to-list price ratio in October has averaged about 98%, meaning homes are still generally selling close to their asking prices, but this is down from earlier in the year when the ratio was closer to 102% to 105%. This shift indicates that buyers are becoming more selective, and sellers may need to adjust their pricing strategies to ensure a successful sale.

"For well priced homes in desirable locations, expect it to sell for close to asking price. If you see a home on the market for over 40+ days, now may be a good time as a buyer to negotiate harder for a price that makes sense for you. You will have less competition and may interact with a more motivated seller" - Joshua Farris, Broker. KW Central Coast #01921964

MARKET INSIGHTS BY CITY | CENTRAL COAST, CA

1. San Luis Obispo: As the county's urban hub, San Luis Obispo remains one of the most competitive markets. However, the city has seen an increase in average days on market, with many listings taking 35-45 days to sell. While prices have remained stable, sellers need to be prepared for negotiations, with many homes selling for around 98-100% of the list price. The median price of a home in SLO is $940K.
2. Paso Robles: Paso Robles continues to attract interest, especially from buyers looking for larger homes or properties with more land. We see prices remaining steady, especially for homes in the wine country region. Buyers may find slightly better deals in this area as it becomes more favorable to buyer’s.
3. Morro Bay: Coastal properties in Morro Bay are still in demand, though they are taking longer to sell compared to earlier in the year. The average DOM has risen to about 40 days, and sellers are seeing homes sell closer to 98% of list price. Properties near the water remain especially competitive.
4. Atascadero: Atascadero has seen an increase in demand, especially among first-time buyers and those looking for more affordable options compared to San Luis Obispo. The days on market here have remained fairly steady at around 35 days, and the sold price-to-list price ratio has held at about 99%.
5. Templeton: Templeton is one of the more sought-after areas for families and retirees looking for a quieter lifestyle while still being close to the amenities of Paso Robles and San Luis Obispo. Homes here are averaging around 40 days on market, with properties typically selling for 97-99% of their asking price.

Looking Ahead

As we move through the fall and into the winter months, the San Luis Obispo County real estate market is expected to continue its trend of slight stabilization. Buyers may have more negotiating power, but inventory will likely remain tight, particularly in the more desirable neighborhoods. Sellers should be aware of the changing landscape and adjust expectations accordingly, while buyers may find opportunities for competitive pricing and less aggressive bidding.

“As the market continues to grow with inventory, buyer demand is not going to look like it did two or three years ago, so it’s going to require some patience from sellers,” says Bonner. “Sellers are going to have to think about not just the list price, but in light of the NAR settlement, the buyer’s cost of acquisition. In order to successfully transact, sellers might have to be prepared to receive offers where the buyer is requesting closing cost credits, concessions, and/or outright compensation of their realtor.”?-Zoocasa.com

If you are looking to make a move in the Fall of 2024 or in 2025, reach out to my team and we would be happy to discuss your goals, timelines, and budget. Our goal is simple, help you make the best decisions and prepare you for success when it comes to selling or buying a home.