High Prices Make Homes Unaffordable and Fail to Attract Sellers in San Luis Obispo and Santa Barbara Counties
Arroyo Grande, CA – August 18, 2017,─ The drought of homes for sale in San Luis Obispo and Santa Barbara Counties last month drove up prices to record levels, making homes less affordable and limiting choices for buyers. Sales responded by falling significantly below levels of a year ago for the second straight month.
Despite lower sales, inventories of active listings in both counties remained depressed, significantly lower than in 2016 and about 50 percent smaller than inventories in July 2014, the year the inventory drought began. A fourth straight month of extraordinarily low numbers of new listings kept inventories from increasing.
Facing prices rising over 6 percent a year and slim listings, buyers were further hampered by the speed with which homes are selling in the two-county region. Homes in San Luis Obispo County spent a median of only 18 days on market before receiving contracts from buyers, the second straight month that the county has set a five-year time on market. Homes in Santa Barbara County sold in a median of 34 days,
“Conditions could not be more ideal for Central Coastal home sellers than they are today. Over the past three years, prices in the region have risen about 30 percent, or ten percent a year. Prices are at or near all-time highs and homes are selling in two or three weeks. With the end of the summer season in sight, owners who are thinking of taking advantage of this extraordinary market should act now before prices taper off in the months to come,” said Amy Gallagher, corporate broker of record for CENTURY 21 Hometown Realty.
In June, CENTURY 21 Hometown Realty closed on 108 homes totaling $48,772,795
San Luis Obispo County
July home sales in San Luis Obispo County fell 12.4 percent from July 2016, and 9.8 percent from June, the lowest number of closed sales since April. Total sold dollar volume for the month was $205,923,399. Listings spent a median of only 18 days on market before receiving a contact, setting a five-year record for the second month in a row.
Supplies of homes for sale in the country were 14 percent lower than they were a year ago and 29.8 percent lower than the five year average for the county. New listings plunged to 18 percent below July 2016 as fewer homeowners listed their homes for sale. Despite the drop in demand, inventories of active listings could not keep up with sales and fell 1 percent from June.
Prices in San Luis Obispo County rose 7 percent from June and ended the month up 6.7 percent higher than they were a year ago. The county’s median sold price of $555,500 set a five-year record for the count, breaking the record set two months ago. Prices may have reached a peak, at least temporarily, as the median price for new listings in the county fell 9 percent from June. For the fourth straight month, sellers realized 99 percent of their list prices at closing.
Strong demand and tight supplies resulted in a new five-year record for time on market for the third time in the past four months. The median time for listings to receive a contract fell to 18 days from 19 days in June and 20 days in May and April, the previous records. A year ago, in July 2016, the median time on market was 34 days.
In the city of San Luis Obispo, sales rose 50 percent in July from June and were 15.4 percent lower than a year ago. Total sold dollar volume in the city for July was $45,242,775. 43.2 percent higher than in June. Prices rose 1 percent from May to a median sold price of $610,000, 6.6 percent higher than a year ago. Active listings were 30 percent below levels of a year ago, and new listings were down 41 percent from June and were 38 percent lower than in June 2016. Homes sold in 34 days, 19.1 percent slower than in May.
Local market data and listings for San Luis Obispo County communities are available at Arroyo Grande, Atascadero, Avila Beach, Cambria, Cayucos, Creston, Grover Beach, Los Osos, Morro Bay, Oceano, Paso de Robles, Pismo Beach, San Luis Obispo, Santa Margarita, San Miguel, San Simeon, Santa Ynez, Shandon, and Templeton.
Santa Barbara County
Sales in Santa Barbara County plunged 44.4 percent from June and were 68 percent lower than a year ago as buyers struggled to find affordable homes for sale. Sales were 65 percent below the five-year average for the county, the fourth straight month that sales fell short of the five-year average. The total sold dollar volume of June sales rose slightly from May to $30,090,723, 6.4 percent below June.
At $395,000, the median price for homes sold in July rose 4.1percent from June and 10.6 percent higher than July 2016. Prices will likely continue to rise next month as the median price of new listings in the county rose to $433,000 in July.
Supplies of homes for sale in the county declined even more in July, falling 5 percent from June, and ended the month 45 percent lower than a year ago. For the second month in a row, a very low level of new listings kept inventories on the rocks. New listings were 68 percent lower than they were a year ago.
Soft demand increased time on market for Santa Barbara County homes. Homes sold in 34 days, slower than 14 days in June and 30.8 percent slower than a year ago and the longest time on market since March.
In Santa Barbara city, total sales volume ended the month at $7,612,000, down 45.5 percent from June and sales were up 50 percent from June, The median sales price rose to $928,500 in July.
Sales in Santa Maria rose 50 percent in July and prices were up 6.6 percent from June, reaching a median of $375,000 for the month. Total sold dollar volume fell to $16,349,900, up 49 percent from June. Homes sold faster in Santa Maria in May, spending only 28 days before they received a contract.
July Home Prices, San LuisObispo County (blue) and Santa Barbara County (red)