As we move through October, what do the latest numbers say about our San Luis Obispo real estate market? Is there anything that can cause our market to shift moving forward?
I know I sound like a broken record, but I once more have to report that inventory is down. In September, it dropped 45% year over year. Pending sales also rose once more, this time to the tune of 18% year over year. Additionally, the number of escrows closed rose 40%, which marks the first time in 2020 we saw more sales than a year ago. In other words, closings have finally caught up to the number of pending sales and everything else that’s happened these past few months. Finally, the number of new listings dropped 30% year over year. Overall, there’s a lot of energy in our economy that’s coming from real estate.
This means we’re about to see a lot more of the same from our market. We’re taking homes off the market at twice the pace that they’re being listed. If we stopped listing homes altogether, we’d have a 45-day supply left. During the Great Recession, it wasn’t uncommon to have a seven or eight-month supply of homes. The difference is unbelievable. On top of that, interest rates are still incredibly low. A friend of mine recently refinanced their home at a rate of 2.69% with no additional costs.
None of us have a crystal ball, but one thing that could alter the state of our market is a change in inventory, which would then affect home prices. For example, many people experiencing financial hardship due to the coronavirus may have no choice but to list their home. Or, many people may be nervous about the prospect of listing their home due to safety concerns. The biggest factor that could impact inventory, though, is the number of new homes that have been approved and are under construction. If this number is big enough, it could make our market look a little more normal. However, this change still would take at least three or four months.
If you’d like to talk more about our San Luis Obispo market or have any real estate needs at all, don’t hesitate to call, email, or stop by my office (we’ll provide the masks). I look forward to hearing from you.