As interest rates continue to drop, home prices have continued to rise. Lower priced properties have been the primary beneficiary of this interest rate move. The average price of a North County home climbed to $312,000, which is a 21% jump on a year-to-year basis. This average price reflects a 1½ % increase over the first quarter of this year. Upward price movement is slowing. We are still in a very healthy market.

     The number of actual homes sold has dropped 10% on an annual basis. As price increases have moderated it has become a much more balanced market between buyer and seller. Sellers are having to give more non-price concessions, such as repairs, to get deals done. Buyers are picky and much more selective. Clean, well-priced properties still sell very quickly. New homes are still in high demand. The move up market, thanks to interest rates, is still very strong. Homes sales should be strong in the third quarter.

     Homes on acreage sales dropped 30% while average sale prices rose 20% to $480,000. Asking prices of homes on acreage are way ahead of buyer demand levels. There is huge value, for the buying dollar, on these properties but actual sales at a million dollars or more are almost non-existent. Buyers are looking at the high-end homes on acreage but actual deals are few and far between. Homes on acreage priced up to $600,000 are still active but buyers are price sensitive.

     Vacant acreage land sales have slowed down to a more normal period of absorption. Traditionally 10 acre parcels, and up, have taken a year or more to sell. The absence of buyers, interested in planting vineyards, has considerably slowed down raw acreage demand. We are still in a decent market but much slower than a year or two ago. Westside acreage is still in high demand and short supply.

     The number of vineyards offered for sale has doubled in the past few months. Most grape varieties are in an oversupply situation, which puts extreme pressure on the price of fruit. Vineyard sales are rare and pricing paid on a per acre basis is way down. The key to any vineyard sale is contracted fruit. It's tough to sell producing vineyards when there is not a buyer for the crop.

     Pricing and sales in the urban markets of Los Angeles and San Francisco is a mixed bag. There is major activity at the entry level and weaker activity as one goes up the price ladder. The economy in Northern and Southern California is tepid but still above water. The future is unclear. Interest rates are driving the home sales markets.

     North County is a relatively strong economic environment. Retail sales are strong. Tourism is solid with good growth potential. We are a desirable area that is trying to accommodate growth. Those two factors, desirability and growth accommodation, are rare in California. Usually desirable areas shut down growth and accommodation is left to Fresno and Bakersfield. North County has done more to promote affordable housing than most communities in California.

     Selling property in North County is getting to be tougher. Sellers have more competition. Marketing, promotion, pricing strategy, property condition, and location are back in play in a major way. Fundamentals in the sales process are mandatory for success. The market has changed. This is still a great market and still a great community.

Pete Dakin
RE/MAX Parkside Real Estate

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