What’s going on in the SLO Housing Market?

November finished off with an interesting data set from a graphical point of view. Below, you will see the graph as I’m taking a look at it and making my speculation on what’s happening in the market. I also used some MLS data and ran some numbers to help me find a direction of where things are going and where we are now.

Median SOLD home price for San Luis Obispo single family residences is at $509,500

Median Pending home price for SFR is at $519,000

Median List price for SFR is at $699,000

When I look at the above data I see a few things happening here that are important to take note of. Firstly, I see that there is a hot segment of our market that is clearing out. That segment would be the SFR price range between $400,000 and $550,000. Homes that are priced in the $400′s are moving quickly and within the range of the median price we are seeing an average day on market of 86 days. When you figure in an average of 45 days of escrow that leaves 41 days of market time before listings are put into contract. That’s pretty aggressive. Buyers are in fact actively pursuing homes that are deals. I don’t think that we are seeing any steals in SLO but certainly there are deals to be had.

Secondly, when I look at the Figure 1.0 I see that less homes are for sale or sold across the board from month to month, year to year and in the 15 month overall. Furthermore, the decrease in those numbers is significant. Several things may be happening here starting with the fact that many homes are being put into contract and pending sale. The number of marketed homes and sold homes pales in comparison to the number of homes that are in contract. Pending sales are up by a significant amount  which leads me to believe that the number of homes for sale is down because the homes that would have been on the market in that segment are instead in escrow, an indicator that the market is picking up. Also, we should see a gain in December and January homes that sold due to the nearly 75% increase in homes put in contract. The number of homes for sale may be down also due to the fact that Fannie, Freddie and several large banks have put a moratorium into effect from Dec. 19- Jan. 2 that will halt foreclosure on homeowners that are in default of their loan.

While the moratorium may not be in effect today I would speculate that the banks have slowed down the foreclosure action and thus lessened the pressure for owners to short sell their homes or put them on the market. We may see a tick up in January once the moratorium is lifted.

In summation; there is a lot going on with the real estate market and when you couple the movement that is occurring with historically low interest rates we are gearing up for a busy 2012 in real estate. The foundation is set to get buyers into some great deals with very appetizing interest rates. For first-time homebuyers this is a golden opportunity to own your first home. For investors, there are deals to be had on homes that could be flipped you’ve just got to find them. 2011 may not have been a recovery year according to many but  I would venture to say that it was a foundation year, crucial to a recovery pattern that we may have never seen before. I certainly hope so.