This is a report on the North County Real Estate market for 2013. North County is a vibrant
market with a diverse array of real estate properties. The current emergency water ordinance merits
attention because of the impact water has on both agriculture and residential country property.
Single family home sales, the bulk of our market sales, have remained consistent with 2012 sale
numbers. Pricing of residential homes has reached a $333,000 average sale value which correlates to a
22% increase over 2012. This price increase is typical for most of California in general. Inventory of
available homes for sale has increased by 5%
Now for the past couple of months we are seeing a tapering of any price increases and demand
is more selective. Every day numerous listed properties advertise a decrease in listed price. These
events are definitely not a backup in prices, but these events represent a plateau in pricing.
Foreclosures and short sale properties, for sale, have decreased and this supply is being replaced by
standard home sales. Interest rates ticked up which appears to have a cooling effect as well.
There are many reasons we have reached this plateau today. Number one is the weak job
market statewide. Any forward momentum, from this point on, will need a healthier economy in our
state. Investors back away from the market as cheap properties disappear. Interest rates hurt the entry
level properties the most of all categories. I think we can hold this value range today net of any
cataclysmic economic event, which is of course, always possible in a fragile economy.
Luxury million dollar properties have picked up steam this year. Property sale numbers have
gone up 40% over last year and inventory has been fairly stable. The value numbers still are below
replacement value costs, in most cases, but we do have many more Clients looking for luxury properties.
We still have at least 2 years supply of luxury product for sale. A bright spot in this market is the million
dollar sales in Orange County, LA County and the Bay Area. Activity is decent in these aforementioned
areas and this activity should trickle down into the North County. We are traditionally the last place to
see high end buyers after Santa Ynez, Tahoe and Napa.
Our local wine industry is still strong. Grape prices are at an equilibrium right now with ample
supply. A number of distressed winery properties have sold as this market cleans up. Buyers are very
interested in vineyards. This interest is being fueled by decent fruit prices but most of all the realization
that planting will most surely be curtailed and planting costs will rise with our water management
There is no equitable solution when it comes to resource management solutions. Somebody
wins and somebody loses. No one really knows what is going to happen as this process plays out. All of
the stakeholders realize a solution is needed. From a real estate prospective this much is certain;
development costs for homes and vineyards will rise over the coming years. Government solutions, in
development, tend to burden future projects more than existing properties. That’s just the way it is.
Commercially you can look around and see vacant properties for sale and lease. Tenants
continue to come and go. Apartment rents are strong and should be stable throughout the coming year.
Economically we have way too many clouds on the horizon to build any momentum for a recovery.
What you see is what you get!
Paso Robles and Atascadero have solid water programs and ample water supply. This situation
should help these communities continue to attract quality business and development in the coming
decades. Tourism and agriculture are the foundation of the North County Economy. For the moment
these industries appear strong.
This “recovery” has been largely fueled by the wealth effect of a rising stock market and the
rising real estate market. Cheap money fueled this aforementioned effect. Now today we are what we
are. Until we have a climate conducive to economic growth we will tread water as a County. At least
this is a great place to languish!
Written By Broker/Owner Pete Dakin www.Passoftheoaks.com