Commentary: Forecast for North County real estate in 2019

PETE DAKIN

This is a look back at 2018 real estate activity in North County. While the past does not equal the future, there are clues to future activity from examining year over year statistics. I am also going to highlight some trends we are seeing today.

During early peak buying season, in June, we began to see buyer resistance to increasing price points in residential single family. Perhaps this hesitation was due to interest rates, fear of another 2008 or just the continuing anxiety we see throughout our country. Whatever the cause of this change, it did not take long for sellers to adjust their pricing to make things happen. We still have a vibrant market and realistic sellers got the message. About 100 fewer homes sold in 2018 versus 2017 but average pricing ticked up 5 percent to $460,000. Inventory is trending upward but choices remain thin at lower price points.

More homes over a million dollars sold in 2018 than ever before in North County. While this segment of the market is relatively narrow it illustrates a couple of key points. Number one is that urban refugee buyers, from Los Angeles and the Bay Area, see great cost value in our properties and our area. Most of these million-dollar-plus properties sell below replacement cost so that is an added attraction to the inbound buyer. Number two is that a number of homes with vineyards sold this year as buyers realized the water ordinance situation and the long-term impact on planting restrictions. Many of these sellers with vineyards are also dealing with the prospect of replanting due to disease, age and varietal preferences. Sellers adjusted and buyers bought.

Our rental market took a breather mid-year but that ended quickly. Rents are still strong and so is demand for the multi-family product. Commercial space in rental and industrial is in demand with most buildings finding tenants after turnover. Templeton will see an explosion of medical/hospitality space in the next decade. Hotels and RV parks have built “it” and they are coming. Tourists come, spend money and leave. That’s nice.

The wine grape market is facing an uncertain path this coming year. Some varietals were very soft in price at harvests end and some even went unpicked. There is still demand to plant on the west side.

California is the sixth largest country in the world and the Central Coast is one of the most desirable and dynamic communities in the state. The following are some trends we are seeing in our office. Significant wealth is shopping and buying in North County. The cost of building and securing entitlements continues to rise making buying existing built properties much more desirable compared to building. Across the country property taxes are rising due to government budget shortfalls. Proposition 13 is an enormous benefit for the real estate investor. Our wine industry is growing and their ceiling is high. More buyers are considering real estate, as an investment, versus traditional equity markets. Water is and will continue to be the number one issue for North County. Traffic concerns are building quickly. People leaving North County for Nevada, Texas and Idaho are being replaced by urban refugees from the Bay Area and LA.

So that’s it from RE/MAX Parkside. I believe North County has a very high ceiling over the coming years. There will be numerous opportunities to buy and sell in 2019. Interest rates are favorable today. Our local economy is strong. No one has it better than we do!

Pete Dakin is an owner of RE/MAX Parkside Real Estate, 711 12th St., Paso Robles. He can be reached at 805-591-5222 or online at www.passoftheoaks.com.

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