How much has SLO County housing value grown since 2000? More than only 15 other cities
It’s common knowledge that San Luis Obispo County is an expensive place to buy a home, but a new report from Construction Coverage shed light on just how far the area’s market value has outpaced the rest of the country.
According to the report, which examines the most and least stable housing markets, the value of the SLO metro area — defined as San Luis Obispo and Paso Robles — grew by a whopping 269% from 2000 to now.
To put that in perspective, only 15 markets of the 208 polled saw more growth in the value of housing over that same time, including several California metro areas.
Arroyo Grande Realtor Barry Brown, whose 19-year career in SLO County has covered much of the period of rapid value growth, said the driving forces behind this growth are simple: SLO is simply more desirable than most places in the United States.
“Inventory, job availability, affordability, desirability of weather and fewer people in the area than many of California’s near-beach locations (are the market drivers in SLO),” Brown said. “We are still experiencing a shortage of available housing. We also have more people in the area than ever with the influx of those that can work from home due to the pandemic.”
Those factors result in a cycle of ever-increasing prices, Brown said; everyone wants to be here, but few can fully afford it.
Brown also shared a California Association of Realtors data set tracking the number of days a home stays on the market between 2008 and 2021, which illustrates the increased demand over time.
Between 2008 and 2021, demand for housing dramatically lowered the amount of time a home stayed on the market. In recent years, Brown attributed the impact to a larger remote-work population moving to the area in the years immediately following the COVID-19 outbreak.
Another factor that has reduced the availability of homes on the market and elevated prices, Brown said, is a lack of building.
“I don’t feel the (SLO County) market is immune (to factors affecting the rest of the country), but I do think the area will fare better if there are factors that affect the entire U.S.,” Brown said. “This would be true due to the continuing lack of inventory.”
Got buyers remorse? You’re not alone
Though the SLO metro area’s housing market entered 2023 with a high median home price of $877,296 — which is more than double the national median of $357,589 — your chances of encountering a value drop after purchasing are on par with most of the rest of the country.
San Luis Obispo County ranked around the middle of the pack (132nd of 208) in terms of the “probability that a random buyer purchasing a home at any point between 2000 and present would have experienced a greater-than-5% price drop following the purchase,” the report said.
In the SLO metro area, that likelihood was 33.3%, which indicates some volatility in pricing in the area. For example, a home in Erie, Pennsylvania — the least-volatile housing market in the country, according to the report — has a 0% chance of dropping more than 5% in value following the purchase, while a home in Atlantic City-Hammonton, New Jersey, the most volatile market in the country, has a 55.7% chance of dropping more than 5%.
Brown said this volatility is a byproduct of a change in house-hunting strategies following the pandemic.
“Housing affordability is a big factor that has been recently hampered by the median price increase since the pandemic and a doubling of interest rates since this time last year,” Brown said. “This has caused many buyers to choose a ‘wait and see’ decision, looking to rent or possibly to live with family. A large drop in new family creation would also dampen demand and, therefore, could impact home prices.”
All this indicates that while SLO’s housing market is somewhat volatile and wildly expensive, it’s not quite as volatile as the country’s most unstable markets.
This story was originally published January 5, 2023 at 5:30 AM.
