The average sales price for a North County single-family home is $265,000. Through the first three quarters of 2002 the total sales for North County properties hit $414,000,000. We are looking at another year exceeding a half of a billion dollars in property sales.

   Historic low interest rates coupled with a moderate supply of new construction are the driving forces in this residential single-family price explosion. Single-family homes have doubled in value in the past five years. Soaring home prices in the urban areas continue to push people to affordable areas such as the North County. We have seen many people, from within our county, move to North County for value and quality of life. The California High School exit exam ranked the schools of Paso Robles, Templeton and Atascadero all at least 10% above statewide averages. Cheap interest rates have created a move up market for all local owners.
We are a very desirable area.

   Homes on an acre, or more, are in strong demand up to $600,000. Above $600,000 dollars buyers are very selective but also more active than anytime in the past few years. Buyers in the high-end range are more quality driven than price driven. People will pay the price but the improvements must be quality. High-end homes still sell for below replacement cost because people will not pay retail for other peoples dream castles. The average sale price for a home on acreage is $425,000

   Raw land, priced at $500,000 or less, is very active. Westside acreage is in great demand with larger parcels commanding upwards of $20,000 a usable acre. Bare ground is a diminishing product category. Urban refugees are building muscle houses and McMansions on prime remaining parcels. The weakening in the premium wine grape market has impacted pricing in large parcels. We have not seen a back up in large parcel pricing but the appreciation has been moderate to flat.

   The premium wine grape industry is in an oversupply situation. Thousands of tons of cabernet and other varieties went unsold this year. This supply situation, net of weather and disease, will take a few years to work out. This year's crop was light and the quality was high. Sales of existing vineyards will be spotty and very price sensitive. Our local wine industry has some very exciting stories and our future is radiant. The quality in our wines continues to be pushed by people like the Baldwins, Stephan, Treanna, Justin Smith, Matt Garretson, Tablas Creek and others. A very exciting place and time in our wine industry.

   Urban real estate markets, in the Bay Area and Los Angeles, have always led the pricing in the North County. The Bay Area is the weak urban sister with San Jose prices actually dropping 4% on a year-to-year basis. Not too bad for the dot com wasteland. Southern California is happening with double digit increases the norm across the board. Imagine what would happen if we had a good economy, healthy stock market and no war!

   Life is good in the North County. When people talk about crisis, in terms of housing and parking, you know this must be the best of times. If you want something to worry about, watch interest rates. If rates go above 7% people will slow down buying. If rates go above 8% the music will stop. It's all about perception. In these good times we should invest in our community. People with money are always looking for quality. We should be the quality leader in the central coast.

Pete Dakin
RE/MAX Parkside Real Estate

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