Over the past few decades, North County has transitioned from an inbound dependent real estate market to a dynamic economy fueled by a number of positive economic factors. We have organic growth from agriculture, tourism, wineries, as well as traditional urban refugee buyers from all parts of the state. This report takes a look back at 2014 North County Real Estate and the prospects for 2015.
The traditional Spring surge in residential home sales never happened. Buyers grew wary of higher price tags. As the year played out, sellers adjusted their pricing and buyers became more active. The average price of a North County Home actually increased over 3% to $346,000 and market sale numbers topped 1000 units. We have a separate category for homes on acreage which topped 370 units with an average sale price of $591,000. With over 1400 market sales in the two aforementioned residential categories, we have a clearly defined market. There are a few more homes for sale today and they are taking longer to sell than 2013. It sure looks like a stable market heading into 2015.
Stability in the residential market should create more opportunities for construction of spec product. Buyers will generally pay a premium for new product and existing properties for sale are certainly not flooding the market. Construction was a huge part of the North County economy over a decade ago and it looks like it’s going to be a bigger part in 2015.
North County is very dependent on small businesses and small businesses have been struggling over the past 6 years. Now these aforementioned struggles have kept a lid on any real movement in commercial real estate. Investors have interest in income producing properties with good tenants. Rents have most likely found their floor today, so this may lead to more investment sales. Buyers have greater interest in multi-family properties as this market is strong in rental income.
Our wine industry is very solid today. We have significant big time wineries with international distribution and high quality boutique wineries with strong following throughout the wine world. The water situation/ordinance will restrict planting grapes and building wineries. Existing vineyards and wineries are more valuable today because of the restrictions coupled with market forces.
Lower gas prices should really help our tourism industry. New hotels will have to compete for business, creating a value driven tourist location. Agriculture has been good in the valley, the Bay area is consistently generating economic growth, and the L.A. basin has also improved. One would think that North County should be well prepped for a decent 2015. In today’s world that means we should not go backward!
There does remain a cloud of uncertainty over our Country. Whether it’s feckless leadership or geopolitical weakness, there is an almost unspoken wariness of the future. This wariness has constipated decision making and left most people playing not to lose. The stock market is booming because there is nowhere else to put ones money. This is not the first time, nor the last, that America will plod through and compete.
Specifically, it’s remarkable that North County has fared so well. We have always had a business community that is invested in our area’s future and government leaders that have been supportive and judicious. As an investment, real estate has not come back as a trendy option. From a protection of asset standpoint, real estate looks to be a good investment alternative. If we can plod through the next couple of years, this areas future could be very interesting indeed.
written by Pete Dakin – owner Re/Max Parkside Real Estate in Paso Robles