SLO County home sales plunge even as prices continue to rise. Here’s what’s happening

A spike in mortgage rates and low housing inventory tamped down California home sales in April — with some of the worst results hitting the Central Coast, according to the California Association of Realtors’ home sales and price report.

Despite the slow housing market, however, San Luis Obispo County home prices continued to rise locally, bucking a general decline statewide.

Across California, the latest figures show home sales in April were down 4.7% compared to the previous month and down 36.1% from April 2022 as single-family home sales stalled.

“All 51 counties tracked by CAR registered a sales decline from the previous year, with sales in 44 counties dropping more than 30% and sales in five counties sliding more than 50% from a year ago,” the report said.

Compared to the previous year, no region of the state performed worse than the four-county Central Coast, which saw home sales decline by 42.8% collectively in April, the report found. The region also turned in the worst performance month-over-month with a 12% drop in home sales.

Mariposa County’s 80.8% year-over-year sales drop was the worst in the state, followed by declines in sales in Calaveras County and Santa Cruz County of 59% and 58.4%, respectively.

San Luis Obispo County had the 10th worst year-over-year sales decline in the state.

Home prices also fell in April across broad swaths of the state.

“At the regional level, median home prices continued to drop from a year ago in all major regions, but only one region posted a double-digit decline compared to three regions in the prior month,” the report said. “The San Francisco Bay Area (-16.7%) remained the region with the biggest sales drop, as six out of nine counties in the Bay Area region fell more than 10% year-over-year.”

Here’s a look at how San Luis Obispo County communities fared.

SLO County’s home sales the worst on the Central Coast

San Luis Obispo County’s housing market turned in the second-poorest performance of the four Central Coast counties, the report found.

Sales of existing single-family homes here were particularly weak, with sales falling 10.1% month-over-month and 45.2% year-over-year, the report found.

However, the overall median home price in San Luis Obispo County hit $925,000, CAR’s report found, beating out March’s median of $895,000 and April 2022’s median of $890,000. That came despite price drops in several cities.

The county recorded 143 total home sales in April, despite 271 active listings that month — 7.5% more than April 2022.

The county’s closest neighbors, Monterey and Santa Barbara counties, didn’t fare much better.

In Monterey County, active listings and sales both declined year-over-year, with sales falling 27.9% to 124 and listings dropping 8.5% to 227.

The median home price in Monterey County grew slightly by 5.4% compared to last year, ending the month at $953,000.

Santa Barbara County’s 227 active listings were 7.5% more than April 2022, but the county saw a significant drop in year-over-year home sales, falling 38.8% to 134 homes sold in April, according to the report.

Santa Barbara County’s median home price also declined by 10% from April 2022 to $1.08 million.

Meanwhile, Santa Cruz County experienced similar market trends to its neighbors. The median home price declined 4.3% from last April to $1.35 million.

Sales fell 58.4% to 74 in April, though active listings grew 12.1% to 185.

How SLO County cities performed

Many of San Luis Obispo County’s largest population centers saw significant declines in the number of homes sold and the median sale price in April, the CAR report found.

The city of San Luis Obispo’s housing market had a rough April compared to the previous year.

The median home price in San Luis Obispo fell 17.7% over that time to $1.05 million, and while 28 homes were listed in April — a 15.6% year-over-year increase — the 19 homes sold represented a 36.7% year-over-year decrease.

Atascadero, the county’s third-largest city, didn’t fare much better.

While the median home price of $809,000 increased 0.8% from April 2022 and the number of listings grew 20% from last year to 30, home sales still suffered to the tune of a 35.3% drop, ending the month with 22 units sold, the CAR report found.

Paso Robles homes stayed on the less expensive end in April but still saw dramatic declines in sales, according to the CAR report.

Despite a 16.7% decrease year-over-year to $666,000 in April and a 10% increase in active listings compared to April 2022, the 24 homes sold represented a 58.6% drop year-over-year.

In Templeton, six homes were sold in April, which was 20% more than the previous year, but the median home price experienced the same dramatic drop seen in several other cities.

Templeton’s April 2023 median home price of $1.51 million was 37% lower than the previous year, the CAR report found, as the number of available listings grew 15.4% to 15.

Morro Bay had a less tumultuous April, with a median home price of $1.03 million that was 8.4% higher year-over-year and a 14.3% bump in active listings over that time, ending the month with 16 listings.

However, sales again stalled, as just seven homes were sold, amounting to a 50% decline from last April.

Farther north, just three homes were sold in Cambria in April, 81.3% less than in April 2022. The decline in active listings was far more modest, falling just 5.6% year-over-year to end the month with 17 listings.

The median home price in Cambria also took a hit in April, dropping 30.1% year-over-year to $769,000.

In Los Osos, eight homes were sold in April, a 20% year-over-year decrease, though home prices climbed 7.4% year-over-year to $1.05 million.

South County home prices spike

In the South County, every city saw home sales drop while prices rose sharply compared to the previous year.

Grover Beach saw prices rise dramatically compared to the same month in 2022, ending April with a median home price of $1.46 million — a 34.2% year-over-year increase — the CAR report found.

Only five homes were sold, which was 28.6% less than April 2022, and just four active listings were recorded, a 42.9% year-over-year decline.

Pismo Beach’s median home price also grew in April, ending at $1.46 million, a 34.2% year-over-year increase.

Home sales declined 45.5% year-over-year with just six sales in April, despite a 33.3% bump in active listings, which amounted to 16 during the month.

Arroyo Grande saw the most home sales of any South County city, with 20 properties changing hands, though this was 20% fewer than April 2022.

Active listings were identical to the previous year, with 24 homes available in April, though these homes were 24.5% more expensive, with a median price of $1.06 million.

Lastly, Nipomo’s nine homes sold constituted the largest year-over-year decline in the South County. Though new listings were depressed 27.8% year-over-year, the median price rose 24.3% to $1.09 million in April.

SLO County market still feeling effect of 2022 inflation

Arroyo Grande Realtor Barry Brown said the Central Coast’s housing market is still recovering from the impact of high inflation in 2022 and the accompanying rise in mortgage rate.

The constant struggle of low incoming housing inventory in San Luis Obispo County is also keeping sales down, he said.

Around this time last year, rates began rising and became a problem for most home buyers in June, which turned out to be the start of an interest rate spike that peaked in October north of 7%, Brown said.

Since then, rates have leveled out somewhat but have not returned to the more favorable levels seen in late 2021 and early 2022, Brown said. According to Freddie Mac, 30-year fixed-rate mortgage rates are currently sitting at 6.57%.

With around 90% of California mortgages locked in at a rate less than 4%, “you’ve got an awful lot of people that don’t want to lose that,” Brown said. “That’s keeping current homeowners from wanting to put their properties on the market, and that’s causing inventory to be restrained.”

Without much new housing stock coming down the pipeline in the immediate future, Brown said this tight market will likely stay unaffordable to most potential home buyers over the coming months.

Brown said the “wild cards” are likely to be the possibility of a recession, which could oust some homeowners from their homes, and ongoing struggles over the debt ceiling in Washington, D.C.

“We have a little slice of paradise here, and it does come at a premium price,” Brown said.