Is there a "Double Dip" in San Luis Obispo County?

Home prices tumble into a double dip...

That's what came out in the local paper a few days ago.

Under that in smaller print: SLO County Stable and Gaining.

The study followed 20 large cities, 18 of which showed a 3.6% drop since March 2010. These are large cities that were probably epicenters of speculation in the run up of easy credit and speculation. I know Las Vegas, and Miami, two of the named cities, are infamous for the steep climb in prices and now the subsequent drop. I suspect the others had their share of this as well.

So I'm curious and I know basic math. What has happened in San Luis Obispo County?

Here's what I found when I figured out the median home price for the month of March 2010, and then found the percent change in the median home price from March 31, 2010 until now:

Pismo Beach had a period where none of the big houses were selling, and now they are. I think that is why we see such a huge jump in the median price.

Next, the article went on to say that the demand has fallen off since the infamous buyer credit expired. Now, I can only address this with my own experience and what I've been hearing from my fellow agents. I have observed that is we've had an unusually busy first part of the year, and now we've slowed a little into what I think is a normal pace for spring.  Properties are selling but only if they are priced aggressively and if the sellers are motivated to respond to the market signals. That is, if they've had no offers and few showings, they lower their price until the market responds with offers and a sale. That is the market now. The distressed properties do create a downward pressure on prices. These sellers (lenders) are motivated to sell fast, so they price accordingly. When they close, appraisers use the data in appraisals. Yes, short sales and foreclosures are causing prices to fall. We will have to get through this distressed inventory, it's true.

I currently have buyers in escrow on a foreclosure in Grover Beach that had 9 offers in on it and it went over the asking price, and still is a great deal.  Last December I also sold a house in Paso Robles that had two competing offers. In Atascadero, I completed a short sale with a buyer who got a 100% VA loan. I sold a large house on 10 acres in Templeton that month to a cash buyer for a great price; another foreclosure.

I did have a listing in Morro Bay that did not sell. It was the classic scenario. Priced higher than I recommended, and they would not reduce that price even though the market told them to via few showing and no offers. It expired. Now he's got a new agent and he's still on the market. Glad to see that one go.

The most difficult part of closing escrows is the loan process. We have gone from super easy credit and fast loan processing to the opposite. By the time the escrow closes, buyers are exhausted from having to supply so much information to their lender. Then there's always the looming trouble of the appraisals. Just had a low one come in on what I thought was a super good deal. I still think the appraisal is wrong, but once those appraisals are in, it is almost impossible to change them through appeal. We renegotiated the price, splitting the difference between the originally agreed upon price and the appraised value. That is another thin seller's have to be ready for.  

I don't want to imply that the market in San Luis Obispo County is rosy; It's difficult out there. Sellers have to be motivated to make the hard decisions. There are great deals out there. Buyers have to come to the table prepared and that means it is more important than ever to allow a good local lender to take a deep look into your financial situation before submitting an offer. They're going to do it anyway, and the seller needs to know that when they accept an offer, the transaction can close.