Last year was another good year for sales on the Santa Rosa Plateau and the Temecula Valley luxury home market, and why not? Prices remain attractive to buyers, inventory if plentiful and interest rates remain near all time lows hovering just below 4%. If there is a negative it comes down to stubbornly high inventory which keeps a lid on inflationary pressure and higher sales prices for existing homes.
On the macro side, the economy is humming, consumer spending is strong and the stock market set new highs almost every month. These factors play into the luxury home market as buyer’s sense of financial well being is as important as the low interest rates we are enjoying. Discretionary home purchases, and the Plateau certainly fits into that category, occur because of want rather than need and buyers like the value proposition our market currently affords them.
Sellers have adjusted their expectations and can assume that a reasonably priced home will sell and they can move on with their next home purchase wherever that may be in the same environment. We saw home sellers down-size, up-size, and even relocate out of state as their needs change, and a liquid market allowed them to do so.
Plateau sales activity produced 60 sales last year versus 56 in the prior year. Sale prices averaged $1,091,875 which was a slight dip from 2018 but the price per square foot was a tad higher at $267 indicating a buyer preference for smaller homes. Prices ranged from a low of $622,500 to a high of $3,200,000 and 27 homes sold for under $1M while 33 homes sold for over $1M.
You have noticed also that there has been a return of new construction on the hill with over a dozen new homes built or under way. We have started selling vacant lots again as some buyers choose to build rather than buy existing homes or ranches. This is an option found in our market that does not exist in many other parts of Southern California but is another reason our resale prices are not moving up significantly.
Land sales on the Plateau last year totaled 32 with 2 more in escrow. Prices for lots ranged from $40,000 to $350,000 for five acre parcels depending upon location, topography, use ability and view. The good news is that inventory levels of vacant parcels is down and may indicate a precursor to a move up on pricing which would ultimately help existing home prices. There are 67 lots under the active category, though that number may go up as we head towards the spring selling season.
Once again we would like to thank you for your continuing support of the Walker Advantage Team and keeping us the number one home selling team the past 20 years. Our office on Clinton Keith (next to Baron’s) serves the Plateau and much of Southwest Riverside County and our team stands ready to assist you in any of your real estate needs. Give us a call for a confidential market analysis and discussion, and we hope you have a prosperous and happy new year.
SCOTT AND BARBARA WALKER & THE WALKER ADVANTAGE TEAM