Despite the cataclysmic earthquake that started 2004, North County experienced yet another record year for Real Estate sales. Total sales volume for all properties in North County topped the billion-dollar mark. In just over ten years our market has increased ten fold. The average price of residential single-family homes has tripled in this same ten-year period. Building costs have doubled over the same time frame. The only thing that has dropped in price, dramatically one would say, is the cost of money. Grape prices have also softened over the past decade but that trend is reversing. Let's look at what's in store for the coming year.
           New home sales have been brisk over the last few years. Paso Robles has been the main supplier of new home product but there appears to be fewer new homes to be built in Paso this next year. Atascadero and Templeton should see an increase in new home construction in 2005. Most new homes will start at a minimum of $450,000 with prices breaking the $500,000 mark in some instances. New home pricing sets the table for pricing on existing homes.
           There were a dozen estate sale properties of significant homes between $1,000,000 and $1,500,000 in the North County. Many of these estates took a year or more to sell while some sold in months. Today there are twenty-eight million dollar plus estates listed for sale. Competition is very strong in this category. There is buyer interest but is very discriminating. Very selective.
           Acreage parcels and homes on acreage are defining product types in the North County. Small bare acreage parcels spiked in the early part of 2004 but leveled out at year-end. Parcel pricing up to $500,000 is strong and Westside acreage parcels are in huge demand. The average price for a home on acreage topped $600,000 for the first time. The home on acreage demand is strong up to the $700,000-$800,000 range. Buyers get thinner as you get closer to $1,000,000.
           The wine industry is coming out of an oversupply situation in fruit and juice. Agriculture is a hard seven with no conscience. Our local industry professionals have chosen the path of quality and this strategy is paying off. Pricing for wine grapes is firming in many varietal categories and many small high quality wineries are selling out production very quickly. This industry is healthy and extremely important to the economic future of North County.
           Developers and County Planners are looking towards San Miguel and Shandon as areas for new housing development. There are numerous infrastructure and entitlement issues to address in these aforementioned areas but the push for housing stock is outward.
           Atascadero is pushing ahead with some exciting development situations within their commercial areas. The opening of the Carlton Hotel is a big step in the right direction. Interest in commercial property is strong and the focus on downtown is beginning to yield dividends. Atascadero has a bright future and very strong pricing in existing homes.
           Interest rates should rise this year, which will moderate any strong home price increases. Rental rates have softened this past year, significantly, due to the number of available homes for rent. New apartment construction in Paso Robles should keep rents affordable.
           One minute we have a crisis because home prices are too high and the next minute we have a crisis because of a bubble in pricing. It's hard to have a bubble when we are cheap in terms of cost value in relation to the rest of California. People with wealth are gravitating to our area because it's nice. If this is a crisis then we have too much time on our hands.
           We are very optimistic about the coming year for Real Estate sales. Homes, acreage, vineyards, wineries, and homes on acreage are all being viewed by candidate buyers from all over the world. We are a quality area that is drawing the attention of wealth from other communities. There are a lot more lookers than buyers but deals are being done and being done at stout numbers. Everyone is wondering whether the glass is half empty or half full. It's about as good as it gets which doesn't necessarily mean it has to get bad. 2005 looks to be positive for sellers and competitive for those looking to buy in the lower price points. Competition to attract buyers is more intense as one climbs the price scale. A favorable economy and moderate interest rates look good when compared to the alternative. We are excited about 2005.

Pete Dakin
RE/MAX Parkside Real Estate