SLO County News BlogGolf, Wine, Real Estate, Business & Travel NewsRecord High SLO Home PricesSaturday, February 26, 2005An improving economy and a healthy appetite for Central Coast property helped push San Luis Obispo County homes in January nearly to the half- million-dollar mark and further out of reach of working-class families.The $495,000 median home price set a county record and represents a 21.5 percent increase from the same period a year ago, according to data released Friday by the California Association of Realtors. In December, the median stood at $475,610, a price only 14 percent of local residents could afford. The last time the median price reached a record high was in September, when the median was $483,900. The median price is the statistical point where half the homes sold for more and half for less. "The market is strong, and there are still very attractive mortgage rates," said Leslie Appleton-Young, vice president and chief economist for the association. "People are still moving in from outside the area. It (San Luis Obispo County) is a lovely place to be. Even at $495,000, the county looks really affordable." Indeed, wealthy baby boomers searching for investment property or vacation homes are fueling the rise in the county's single-family home prices, which have seen double-digit growth annually since 1999. Newcomers from the Bay Area, Central Valley and Los Angeles have money to spend on homes that may seem like a bargain in comparison, said Appleton-Young. The 10 cities and communities with the highest median home prices in California during January include Newport Beach, at more than $1 million, the Bay Area's Mill Valley at $937,000, and the south Santa Barbara coast at $1.2 million, according to the association. Statewide, the median price of an existing home in California in January increased 20.1 percent to $485,700 and sales increased 7.1 percent compared with the same period a year ago, according to the association. Many San Luis Obispo County communities have already soared past the half-million point. In December, Pismo Beach had the highest price with a median of $730,000, followed by Cayucos, which posted a median price of $685,000. Some areas, such as Oceano with a December median of $397,500, are inching upward. A local breakdown of January median home prices is not yet available. Richard Watkins, chairman of the Central Coast Multiple Listing Service, isn't ready to call January's numbers the start of a trend. For one thing, the median price can move up if a cluster of expensive homes sell, even if sales at this time of year are relatively slow. Sales in the county dipped 17.4 percent from December 2004 and remain unchanged from a year ago. "This may be a spike, which happens from time to time," he said. "It may very well go down next month. When there's a period of crappy weather and flat sales, that means there's just a few more expensive houses sold, and that tugs the median up." Still, Watkins and other real-estate observers are confident in the strength of the market. In recent weeks, some have suggested that it's only a matter of time before the housing bubble slams San Luis Obispo County, the Bay Area and Santa Barbara. "When you start seeing the inventories build and houses not sell, then you can say they're overvalued," Watkins said. "If buyers are willing to pay the money, then it's not overvalued." Bill Watkins, economist with the UCSB Economist Forecast, said he's not concerned about the month-to-month variation in the median price. The long-term forecast, however, indicates higher prices in the years to come. In four years, Watkins predicts the median price will be $730,800. "We're on track," he said. County home prices reach record high The Tribune, Julie Lynem To see more of The Tribune, or to subscribe to the newspaper, go to www.sanluisobispo.com. (c) 2005, The Tribune, San Luis Obispo, Calif. Distributed by Knight Ridder/Tribune Business News. Read More
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