2011 3rd Quarter North County Real Estate Review
Real Estate in NorthCountyis healing across most product categories. The first step in the recovery process is an increase in closed sale transactions. Properties in all categories have experienced a year to year increase in sales volume. Some property types are generating more activity than other categories.
Over 200 more homes sold throughout the first three quarters of 2011 as compared to the same period in 2010. The average sale price for single family homes today is $260,000, which is identical to the average price the first quarter of this year. More than half of the residential single family homes were either foreclosures or short sales. From a supply stand point there are 100 less homes for sale today versus this same time one year ago.
All indicators point to a steady supply of distressed properties coming into the market in the coming months. There is still a greater demand for lower priced homes than for those over $400,000. The higher priced homes have yet to garner any real traction forward. Due to the increase in sales there are enough comparable transactions to define market pricing. Price is still the dominant theme in our real estate marketplace.
High end properties in the million dollar category saw a doubling of sales in 2011 as compared to 2010. Fifteen, million dollar home sales have been recorded thus far in 2011, versus eight in all of 2010. From a supply standpoint we still have 65 upper end million dollar properties for sale, or four years of inventory. Buying activity at the upper end is fickle.
Lots and raw acreage sales are still wobbly. This market remains the weakest segment of our real estate business. We are starting to see some interest in acreage for planting wine grapes. Grape pricing has firmed up and wine sales are holding their own market share. Successful wineries are looking to control their source of fruit for a longer period of time. Paso Robles has a lot of upside in the wine world.
There has been modest buying activity in commercial property. Most of the building sales have been distressed properties but buyers are buying on a selective basis. Tenant demand for rental space is still very weak. The foundation for a healthy commercial real estate market is tenant demand. Vacant buildings for rent must start to fill up before the commercial market achieves any forward traction.
Financially, most people are more concerned with losing money than with making money. Many people have more concern with the safety of their money in banks and stock funds than they do owning real estate. But, investors are seeing real estate as a flight to safety! Our 35% increase in home sales tells us that some buyers are more comfortable with market values in NorthCountythan they are in other parts of the U.S.
Our collective national psyche is laboring under an oppressive malaise. Most of the damage that has occurred has been self-inflicted. We believe Americawill figure it out. NorthCountyhas a future brighter than most communities in the world. In the end, it all comes down to supply and demand. The price reset has happened in NorthCounty. Clearly our market pricing is attracting buyer activity. We believe the demand for the lifestyle here is growing. Where else would you rather be to enjoy the day?
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