January 2025: SLO County Market Update

Within SLO County, as of January 7th, 2025, there were 396 single-family homes on the market in San Luis Obispo, ranging in price from the probate sale of a 2bed, 1bath tear-down house in California Valley for $35,000 to a 637-acre ranch located between SLO and Los Osos complete with a 7,400sf main home, 50 acres of avocados and 120 acres of farm crops listed for just under $23 million. There were 152 homes under contract and 140 which closed escrow in the 30 days prior. In the preceding month, single family homes were selling for an average of $593 per square foot, with a median sale price of $930,000 and a median time on market of 29 days before an offer was accepted. Market inventory remains limited, with current inventory down 28% compared to summer 2024. The number of new listings coming to market, active listings and pending sales have all declined month over month since September (somewhat expected going into the end of the year) with restrained but positive expectations for the start of 2025. Early spring could be an excellent time to list your property if considering a sale given high prices and few options for home buyers.

All that being said, mortgage rates kicked off the year with their highest level since early July 2024. With consumers remaining resilient and the economy expected to grow moderately in 2025, the Fed is proceeding more cautiously with further rate cuts in the next 12 months. The bond market reacted accordingly to the Fed’s latest outlook and prompted rates to climb higher in the last two weeks of 2024. Meanwhile, resilience in the job market, stickier-than-expected inflation, and policy uncertainty under the incoming administration are factors that contribute to the Fed taking a more gradual approach towards lowering rates in 2025. With the latest spike in rates, the housing market is seeing some softening at the end of last year as mortgage application activity began to slow. While a soft start in home sales in California looks likely for the beginning of 2025, the housing market is still expected to grow modestly this year with rates projected to decline steadily in the next 12 months.

Link here to SLO County Median Sale Prices for Single Family Homes

Link here to SLO County Average Sale Price Per Square Foot