Looking at August in San Luis Obispo County, our inventory is still down from a year ago by about 42%, which is significant. Our pending sales have also decreased by about 28% from last year at this time, which is a much larger drop than in July. That’s why you may be hearing that the real estate market is slowing or normalizing. We had 124 new listings come on the market in August, which is around 16% less than last August, and closed sales were almost the same with roughly 1% fewer.
As we look at those stats, we have a few things to consider. Currently, we have about twice as many pending sales as new homes coming onto the market. If we go back to March, we had about 307 homes go into escrow and only 96 homes come onto the market, so three times as many sales as new homes for sale.
We keep receiving the same questions over and over: Is there a crash coming, is the market going to drop? I can’t tell you with 100% accuracy because I don’t have a crystal ball, but I do know that inventory both locally and nationally is still at an all-time low. Mortgage interest rates are at historic lows below 3%, and our demand is still exceeding supply. All that tells us that at least for the near future, it doesn’t seem like there will be much change in the marketplace.
"Inventory both locally and nationally is still at an all-time low."
You can always wait to buy, but if you want to get an excellent rate and plan to hold onto your property for a while, it’s a good time. For example, if you ask almost anyone who bought a home 50 years ago in this county if they made a good decision, the answer will be yes. Sometimes there are anomalies like 2008 to 2010, which was a tough time for real estate, but all the things that caused that are not present today.
I want to leave you thinking about this adage: “It’s not timing the market when investing or buying real estate, it’s time in the market.” Over time you’ll build wealth, your equity rises, and that’s how you win in the game of real estate.
If you have questions about our market or real estate in general, give us a call or visit our website. We would love to help you. Also, thank you for all your great referrals!