The SLO Chamber’s Business and Economic Council met on November 28 to discuss all things real estate in SLO County. Local experts shared future outlooks for residential, commercial and industrial real estate – here’s what you need to know.
Residential
Housing supply is low in SLO County. For example, as of November 28, 2023, there were only 32 single family homes for sale throughout the City of San Luis Obispo, with prices ranging from $659,000 to $1,000,000. Owners aren’t selling, likely because they have low mortgage and interest rates that were locked in when they first purchased. Tract housing remains a popular option with a lower average sale price of $475,000 to 575,000.
As expected, it is difficult for many employees in SLO County to afford to purchase a home locally, creating a workforce demand for housing that’s only increasing and a growing need for talent to sustain employment at local businesses.
Commercial and Industrial
SLO County and Santa Maria has a shortage of new commercial structures being built, so the focus is currently on repurposing existing buildings for a variety of commercial needs.This is resulting in growing businesses staying in their current spaces, even if they’re outgrowing them.
The same can be said for manufacturing and industrial businesses – due to the lack of supply, they are staying where they are currently at and out of the area businesses seeking to grow or relocate here are hindered by the costs associated with necessary tenant improvements. We’re also seeing warehouses being converted and used as office spaces and instances where the square foot price for a warehouse is higher than that of office space.
Some other market trends worth noting include:
- Low supply is the new normal.
- Home ownership, on average, has increased from 7 years to 12-13 years.
- Owners who are locked in at 3% interest rates from pre-pandemic purchases will likely stay in their homes for 10-20 years.
- The average household size is smaller.
- Parents are buying properties for the student population, and 9% of homes in SLO County are second homes.
- Currently, there are only 450 listings, compared to 2,500 in 2009.
- Higher interest rates have resulted in higher monthly payments.
- There are 3,000 short-term rentals throughout the county.
Want to learn more? Save the date for Housing Summit on Thursday, March 14, 2024, where we will host housing experts to dive into all things housing in SLO County.