San Luis Obispo County’s Real Estate Trends

By Ermina Karim

San Luis Obispo County’s median home price set a record in 2006 even as sales in the county hit an 11-year low.

The annualized median home price last year was $549,000, up 7.6 percent from the 2005 median home price of $510,000, according to Data Quick Information Systems, a La Jolla-based research firm. The monthly median price — the statistical point where half the homes sold for more and half for less — peaked in June 2006 at $585,000.

However, successive monthly declines through the fall translated into a December median home price of $497,000, a 0.4 percent decline from December 2005 and a 3.1 percent slip from November 2006, according to Data Quick.

Home sales, meanwhile, were on a downward spiral for much of 2006, leading to the lowest number of home sales since 1995.

Just 3,741 homes (new, resale, attached and detached) were sold in 2006 –a 34 percent decline from the 5,699 sold during 2005, according to the research firm. Sales were off nearly 37 percent during December from the prior December.

“We saw sales fall sharply in 2006 as speculators continued to dry up, borrowing costs rose and a growing number of would-be buyers decided to watch from the sidelines, hoping for prices to drop as the inventory of homes for sale grew,” Data Quick analyst Andrew Le Page said.

The nearly 8 percent gains in the annualized median home price were primarily fueled by a 20 percent increase in new-home prices to $585,500 from $485,000. However, it was the slowest year for new-home sales since 1997, with just 675 sold during 2006. The median price of detached homes for resale was up 2 percent at $560,000, while resale condos moved up just 1.5 percent to $400,000, according to Data Quick.

Despite last year’s housingmarket downturn, many local real estate professionals are optimistic about thisyear’s outlook.

“We have seen a bit of a rebound in terms of activity,” said Wes Burk, chair of the Central Coast Regional Multiple Listing Service Committee andmanaging broker of The Real Estate Group in San Luis Obispo. “We are estimating 3 percent to 5 percent in overall appreciation with sales activity up significantly over last year. We expect a more normal housing market.”

“We are seeing signs of stabilization,” said Robin O’Hara, a real estate agent with Keller Williams Realty in Pismo Beach. “Sellers are more realistic, and more buyers are stepping up to the plate.”

But Data Quick’s Le Page says it’s still too early to predict how the housing market will fare in 2007.

“We don’t think it’s likely the market will see any big shifts over the winter. This spring we’ll find out how much demand there is out there at current prices,” Le Page said. “With so many unknowns out there right now — including the direction of the economy, inflation and interest rates — you might as well throw darts at a dartboard when trying to predict the housing market for the next year or more.”

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