NewsPrice of Paradise


Nearly half of San Luis Obispo area homes selling above asking price

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Posted at 6:17 PM, Feb 15, 2022
and last updated 2022-02-15 21:17:42-05

More people are proving they'll pay a hefty price to call the Central Coast home.

"The market is really fast-moving and it's hot. That's a common way to describe the market right now and we're experiencing really low inventory and high demand and that's created an upward pressure on prices," explained Kate Hendrickson, real estate agent with Better Homes and Gardens Real Estate Haven Properties.

Back in 2017, local homes were selling for an average price of $592,000. They've increased every year since, breaking $700,000 in 2021. Already in 2022, the average is just shy of $750,000.

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Home prices have been on a steady climb since 2012, the last time there was a lull in the market and the average price was just over $400,000.

And those prices, according to the California Center for Jobs and the Economy, just keep growing.

Nearly 50% of houses in San Luis Obispo County right now end up going for more money than sellers are asking for, according to a report by Porch.

"This is beautiful. This is where it's at. I love living here so I think it's worth it," said Josh Frantz, a recent home buyer.

Real estate professionals say there are a lot of factors that feed into this issue, including historically low interest rates and millennials entering the market, but the main factor is supply and demand.

In a world where millions of Americans now have the freedom to work from home, and interest rates are at historic lows, many people are cashing in the big city hustle and bustle for the sleepy beach town life.

"We have a lot of demand coming from San Francisco or Southern California, people coming from these high-paying jobs or tech where they can work from home and they're choosing the Central Coast," Hendrickson said.

"Working from home really changed things for a lot of people and when deciding where you want to live, a lot of them chose the Central Coast," added Joshua Farris, owner of Joshua Farris Realty Group.

Real estate experts say when people from these bigger cities sell their homes, they come here loaded with all that cash. It allows them to pay well over the asking price, which causes a snowball effect of inflation.

"As the neighbor's home sells for $20,000 over asking price then the neighbor says, 'well, I'm going to try to get $10,000 over asking,' so they list for higher and as interest rates drop, people are able to sell for more," Farris explained.

With this new influx in demand, realtors say there are simply not enough homes to go around. So if you want to buy, you have to be prepared for a bidding war.

"One thing I have to do is feel that temperature out with my clients," Hendrickson said. "Are you ready to hit the battlefield? I'm there with you but that's what it's like out there right now."

If you are willing to move fast, make some concessions and fight, it could make an intimidating process a little bit easier.

"We did have to adjust and make some sacrifices and changes from our ideal location but all and all I'm happy," Frantz said.

With such a fast-moving market, whether you're a buyer or a seller, the best advice from realtors is to be prepared because this might be the new price of paradise.

Real estate professionals say it's unknown if we can sustain these prices or if the market will crash. They believe there will be a cool down at least but prices may never really come down like home buyers may hope.