SLO County’s median home price rises while sales slow. Here’s what’s happening in your town
As a particularly wet and cold winter gives way to spring, San Luis Obispo County’s housing market is looking to rebound from a slow start to the year, which was likely dampened by the weather and high interest rates.
Home sale prices in some local cities rose from January to February, but other areas saw significant drops. Meanwhile, the number of sales and the time on market also lagged behind the same period last year.
Rents grew gradually compared to the past year, offering little respite for renters living in one of California’s tightest housing markets.
SLO County home sale prices increase as market cools
The SLO County housing market got a bump in February compared to the more modest performance seen in January.
The median home sale price in February for all homes in SLO County was $785,000, a 0.6% increase year over year, according to real estate brokerage site Redfin, while the 143 homes sold in February represented a 33.5% decrease year-over-year.
But homes spent a median of 44 days on the market, up from 23 days in February 2022, Redfin data showed.
The median home sale price for the city of San Luis Obispo rose 2.7% year over year to reach $911,270 in February.
A total of 21 homes were sold in San Luis Obispo in February, down 22.2% from the previous year.
Homes there spent 35 days on the market, 10 days longer than in February 2022, Redfin said.
In the North County, the median home price in Paso Robles fell 13.7% year over year, dropping to $643,000. The number of homes sold there in February — 22 — was down 15.4% from the previous year.
Homes in Paso Robles spent 97 days on the market, up by 87 days year over year, Redfin data showed.
In Atascadero, meanwhile, the median home price jumped 24.2% year over year to $745,000, the Redfin data showed, but activity was slow with only 11 homes sold in February, a 64.5% decrease from last year.
Homes there spent 23 days on the market, an eight-day increase from February 2022.
Cambria’s housing market saw declines in price and number of sales: the seven homes sold in February went for a median of $800,000, a 31.2% drop year over year, though homes spent a median of 91 days on the market, which represented a 64-day increase.
Los Osos saw a less precipitous drop in prices, falling 10.7% year over year to $777,500. Only eight homes were sold in Los Osos in February, Redfin data showed, a 20% decrease from last year.
To the north, Morro Bay’s housing market similarly pumped the breaks, with only four homes sold in February, a 69% decline from the previous year.
Morro Bay saw a 16-day decrease in the number of days on the market to 25. However, these homes saw lower prices, too, with the $808,500 median price representing a 19% drop from last year.
The three biggest South County markets — Arroyo Grande, Pismo Beach and Grover Beach — all saw median home sale price decreases in February, Redfin said, with Grover Beach’s median sale price dropping 27.1% to $705,000 from the previous year.
Grover Beach homes spent 19 days on the market — a six-day decline from last year — but the 10 homes sold accounted for a 150% increase over this time in 2022.
By comparison, Arroyo Grande’s market changes were far more modest: The median sale price of $755,000 in February was down just 1.5% from last year, while the nine homes sold was half of the previous February’s total. Interestingly, the median time on the market’s drop to seven days — a 35-day decrease — represented increased competition for the South County city.
Oceano’s housing market picked up the pace in February, as the median sale price climbed 21.9% to $780,000, while the four homes sold last month were down 33.3% from the past year.
Pismo Beach, the most expensive housing market in the county, saw its median sale price plummet 17.7% compared to February 2022, settling at $1.1 million, Redfin’s analysis found. A total of 11 homes were sold, down 37.5% from the previous year. They spent 60 days on the market, up 54 from last year.
What about mortgage rates?
Rates for both 15- and 30-year fixed rate mortgages appeared to gradually decline through the month of March after a sudden increase in February, according to rate tracker Freddie Mac.
Mortgage rates hit their highest level in March since Oct. 24, when 30-year mortgage rates peaked at 7.16%, but have begun to regress since rising to 6.8% for a 30-year mortgage on March 10.
Meanwhile, 30-year mortgages sank to 6.34% by March 23, while 15-year mortgages declined to 5.6%.
Vacation rentals see occupancy rates rise
Rent increases continued to slow down nationally and across the state of California, according to a report from Rent.com.
February’s median rent for all unit types in California settled at $2,968, a 1.15% increase from February 2022, and a 0.51% increase from January 2022, the report found.
Those small increases come ahead of peak booking season for short-term rentals, often referred to as vacation rentals, an analysis from AirDNA found.
The AirDNA report found occupancy rates nationwide are rising “well above” pre-COVID-19 levels. Although occupancy rates have been lower year over year for the past 12 straight months, that trend is likely to change soon.
The average daily rate, which represents the average rental income in each occupied room on a daily basis, rose 5.9% in February compared to the previous year, AirDNA said. That was the highest increase since October 2022.
The number of nights booked at vacation rentals in February increased by 14.8% compared to a year earlier, the AirDNA analysis said, representing an additional 2.4 million nights booked over that time in 2022.
“STR (short-term rental) guests tallied 12.9 million nights stayed in February,” the AirDNA analysis said. “This marks the lowest level of STR demand since February 2022 but still represents an increase of 17.9% on a year-over-year basis. This was up from 14% year over year in January and is equal to the average demand growth over the past 12 months.”
The vacation rental market appears to be on the rebound in general.
According to AirDNA, available listings climbed 26.1% across the country in February compared to the previous year, reaching 1.27 million so far in 2023.
Though occupancy rates at short-term rentals fell in February to 55.7% — a 1.8% decrease from February 2022 — the number of nights booked are up 14.8% compared to this time the previous year. This essentially means fewer locations are seeing more bookings.
The value of those bookings was higher, too.
The average daily rate reached $327.90 nationally, which was a 5.9% increase year-over-year, AirDNA said.
“What does this mean in broader terms?” the AirDNA report asked. “In short, it’s a good sign for hosts, managers and investors. After two months of healthy booking activity — a combined 39.6 million nights — the first half of 2023 is poised to be another solid year for STR demand at large.”
SLO homeowners pay less in property taxes
According to a new report from Construction Coverage, homeowners in the San Luis Obispo metro area, which includes Paso Robles, pay a lower property tax rate than those in most of the country.
The effective property tax rate for owner-occupied homes in the SLO metro area was 0.6% in 2021, the analysis found, the most recent year in which data was collected.
For context, compared to all 356 metro areas included in the Construction Coverage analysis, that rate ranked 264th overall.
While much lower than the country’s 1% average effective property tax rate for owner-occupied homes, the SLO metro area fared much worse in the category of median property taxes paid for owner-occupied homes.
SLO homeowners paid a median property tax of $4,380 in 2021, the analysis said, the 27th-highest payment of any metro area.
Nationally, the median property tax payment is $2,795, the analysis found.
Construction Coverage also highlighted the disparity between household incomes.
Although the median owner-occupied household income is $69,717 nationally, SLO owner-occupied households make a median of $80,625, the report said.
