Editor’s note: This is the first in an ongoing series on what the median home price will buy in various San Luis Obispo County communities.
If you’ve ever gone house hunting in San Luis Obispo, you know how difficult it can be to find the right place at the right price. You’re more likely to find many wrong places at many wrong prices.
That challenge is exacerbated when the market is hot and inventory is in short supply, which is the case for both these days, according to local real estate experts.
But that doesn’t mean there aren’t homes out there that might fit your needs.
In San Luis Obispo, homebuyers looking for a reasonably priced house will be giving up size, amenities and modern upgrades for location. Typically, that means they’ll be choosing among smaller single-family homes or condos that may have dated decor or be in need of remodeling.
What you’ll get for your money in SLO
As of April, San Luis Obispo County’s median home price stood at $530,000, according to real estate tracking firm CoreLogic. In San Luis Obispo, these moderately priced homes can be found on the south side of town, near Laguna Lake, or on the east side, near Southwood Drive and Laurel Lane, said Natalie Tartaglia of Tartaglia Realty.
There, buyers can find two- to three-bedroom homes ranging from 700 square feet to more than 1,500 square feet. San Luis Obispo’s least expensive options are condos, which can be found in the $300,000 range on the east side of town, also near Laurel Lane.
Moderately priced homes probably won’t be move-in ready, and will likely need more work than more expensive ones, said Shannon Kessler a Century 21 Hometown Realty broker who manages offices in San Luis Obispo and Los Osos.
For example, a two-bedroom, one bathroom house on Hathway Avenue that’s selling for $549,000 was built in 1969 and contains dated tile in the kitchen and bathroom. It’s also tucked away on a triangle lot between Highway 101 and the Montalban Street off-ramp.
Condo buyers have a better chance of finding a home that’s moderately priced and in need of fewer renovations, Kessler said. A two-bedroom, two-and-a-half-bathroom condo selling for $519,000 in the Villa Rosa complex on Garibaldi Avenue was built in 1994 and comes with modern appliances and a fireplace.
A seller’s market
Homebuyers’ chances of finding those moderately and low-priced houses are affected by a lack of available homes, which fuels competition — both from potential residents and from parents of Cal Poly students looking for investment properties, Tartaglia said.
In addition, some homeowners are avoiding selling their houses because they want to maintain their favorable interest rates, which keeps properties off the market, Tartaglia said.
“There is a low inventory of available houses in SLO,” she said in an email. “That causes over-bidding and high prices. It tends to out-price first time homebuyers who don’t have a big down payment because they don’t have equity in an existing home or proceeds from the sale of a home.”
An Association of Realtors report released in May said San Luis Obispo County homebuyers need to make at least $113,020 to afford a $550,000 home, which is possible for only 26 percent of residents.
Some buyers are also able to purchase homes with cash, which gives them an edge over those who might need to take out loans, Kessler said: “Unfortunately, cash is king.”
These days, homes in San Luis Obispo can have up to four interested buyers and will sometimes sell in a week, although the average time on the market is currently 37 days, Kessler said. The competitive market causes many homes to sell for $5,000 to $10,000 over the initial asking price, she said.
To be a competitive buyer — other than coming up with cash — homebuyers should work with Realtors who knows the ins and outs of the San Luis Obispo housing market, Kessler said. Being prequalified and preapproved for a loan is also important in such a hot market, she said.
Some buyers even submit statements about themselves and their families to give sellers a better idea of why they want the houses they’re vying for, Kessler said.
“You’ve got to be ready,” Kessler said. “When you submit that offer, you’ve got to be competitive.”