High-end, million-dollar properties in San Luis Obispo County are selling much slower these days.
When the housing bubble burst and recession hit, the upper end of the real estate market slowed too as personal wealth declined, home equity dried up and credit tightened. That made it difficult for potential upper-end buyers to trade up or purchase coveted vacation homes, say those who track the real estate industry.
A total of 82 single-family homes on the market for $950,000 or more have sold in the county from Jan. 1 through Sept. 24, according to data from the Central Coast Regional Multiple Listing Service. That compares to 141 homes sold in that price range in the same period in 2008 — and 269 homes sold in that price range in the same period in 2005, considered by economists to be the peak of sales activity.
"The negotiation process is much more intensewhen it comes to higher-end properties," said Linda Wilson, owner/broker of Wilson & Co. Sotheby's International Realty in San Luis Obispo. "There are buyers out there, but they have a lot of choices."
Such choices exist countywide. As of last week, there were 427 single-family homes in the county priced at $950,000 or more, and right now, there’s more than two years' worth of inventory. Fifty such properties are listed in Arroyo Grande alone, and more than 40 each in Paso Robles and Cambria.
The sales also are not happening quickly, real estate agents say.
The average days on market — from the time a home is listed to the time it's considered a pending sale — is 216 days. In a normal market, it usually takes about three or four months to close a deal.
"The reality is that some of them that have been sitting for a long time haven't had the price adjustments they needed," Wilson said. "Pricing is the factor, and the difference between a sale and no sale."
Steve Gonzales, co-owner and managing partner of Cornerstone Real Estate in Shell Beach, said some homes have been for sale for more than a year. Homes in the high $900,000s to the low millions have been particularly tough to sell, he said.
One ocean-view home near the Cliffs Hotel had been listed for more than $1 million. A potential buyer recently offered $850,000.
"The buyers are out there lying in wait, waiting for the next homeowner selling for a million to reduce it to the $800,000s or $900,000s," he said.
Richard Watkins, an agent with Gilligan Real Estate in Cayucos, said the values might be there, but the buyers aren't biting.
"The problem is that too many people who would like to buy in those prices ranges have to sell someplace else, and selling isn't an easy thing to do these days," he said.
Read more at SanLuisObispo.com