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Real Estate NewsletterPublished October 6, 2025
January 2025 Central Coast Housing Market Update: Home Prices, Interest Rates & Real Estate Trends to Watch
{original post 5/14/2025}Hello! Thanks for tuning in to this month’s newsletter. Our goal is to bring you valuable real estate content and local updates, so we hope you enjoy it. We would also love to hear from you! Let us know what type of content you’d like to see more of in next month’s newsletter! In this e-newsletter, we’ll provide the latest 2025 forecasts and discuss the current insurance crisis. There are rapid changes in the industry on a daily basis, and it's our goal to educate and empower each of you through this monthly newsletter. Please reach out to us with any questions, comments, or concerns–we are here to serve you! |
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| Central Coast Housing Market SnapshotAnd they’re off! Buyers and sellers are gearing up for what looks like a big year in real estate. Our phones have been ringing daily with buyers shopping here on the coast from all over and sellers finally getting ready to sell their homes. With this flurry activity, we want to keep you posted on what we are seeing in the real estate market. Home prices are projected to rise 5% nationwide and 6% in San Luis Obispo County, with a total 20% price appreciation expected over the next five years. SLO County homes are selling for a median price of $875,000, with a price per square foot of $529, which is up 5.8% from last year. There are currently 575 houses actively listed for sale in the county, which is an 11.2% increase year over year. Meanwhile, days on market jumped to 28, which is up 64.7%. For a broader picture of the state, the California Association of REALTORS® (C.A.R.) has released its 2025 Housing Market Forecast, confirming that we are in for a more dynamic year as we start to see lower interest rates and more homes coming on the market. Key Market Projections for California:Home Sales: Expected to rise by 10.5%, reaching 304,400 units in 2025, up from the projected 275,400 units in 2024. This means there will be 10% more options for buyers to choose from, which will be like going to Costco and finding a whole new aisle of merchandise just opened up. How exciting is that! Median Home Price: Forecasted to increase by 4.6% to $909,400 in 2025, following a 6.8% jump in 2024. Price appreciation hasn’t slowed. Waiting for prices to come down to buy isn’t a winning strategy. Mortgage Rates: The 30-year fixed mortgage rate is expected to decline from 6.6% in 2024 to 5.9% in 2025. While we won’t see the 2–3% rates of the past anytime soon, getting into the 5% range by late 2025 or 2026 would be a welcome relief. Housing Affordability: Projected to stabilize at 16% in 2025, holding steady from 2024. In 2020, 32% of California households could afford the median priced home and today it is only 16%. Building more housing to help affordability should be one of California’s biggest priorities. Inventory Growth: Active listings are expected to rise slightly above 10%as the market unlocks more supply. Yay, more homes to choose from! What’s Driving These Trends?Lower Borrowing Costs: Falling interest rates will ease the “lock-in effect,” motivating homeowners to sell and buyers to re-enter the market. Steady Economic Growth: While GDP growth is expected to slow to 1.1%, the economy remains stable, providing a solid foundation for real estate activity. Persistent Housing Shortage: Although inventory will improve, demand will remain strong, keeping prices on an upward trend. What This Means for Buyers & Sellers With home prices rising and affordability still a challenge, it’s clear that real estate isn’t getting any cheaper. Inflation and construction costs continue to drive up home values, and limited supply keeps competition strong. For buyers, 2025 will be an opportunity to secure a home before prices climb higher. Increased inventory will also provide more options, though competition will remain. For sellers, rising home values and more buyers in the market make it a better time to list. If you’re both selling and buying, you may be sitting on a tremendous amount of equity that can be rolled into your next home purchase. The average homeowner in the country is sitting on $311,000 in equity. That’s a lot of money to work with! Navigating the market takes strategy, and working with a knowledgeable real estate professional is key. If you have any questions or need guidance, we’re here to help! Just for context, we have 2,657 real estate agents in our local associations on the Central Coast and last year there were only 2,616 home sales. That’s right - there are more agents than houses selling out there! What does this mean for buyers and sellers? Who you work with matters. Not all real estate agents are equally experienced or equipped to help you on your next move. When you’re about to make a move that is as expensive as a real estate asset, you want to make sure you hire the right agent for the job. |
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| The LA Fires & California’s Growing Insurance Crisis In the wake of the devastating fires across Los Angeles, homeowners and buyers are facing a growing insurance crisis. Major insurers have been pulling back from California due to rising wildfire risks, making it harder—and more expensive—to secure coverage. What does this mean for you? Homeowners – If you already have a policy, review it now to ensure you're adequately covered. Some insurers are non-renewing policies, so be proactive in exploring options. Buyers – Factor in higher insurance costs when budgeting for a home. Lenders require proof of coverage before closing, so securing a policy early is key. Sellers – Buyers may hesitate if they struggle to get insurance, so work with your agent to highlight fire-mitigation features and connect with local insurance providers. Three tips to help mitigate risk during the moving process: Try to avoid shopping in areas that are high fire risk. Our brokerage also provides a free tool to help you vet a property before you get too far into the process. If you have questions or need help navigating this shifting landscape, reach out—we are here to help.If you’re worried about insurance costs going up, which is a valid concern, you must simply shop for homes at a lower price range to mitigate the increased costs. For example, if you’re comfortable with a $5,000/mo total payment, shop for homes that would be at a $4,500/mo payment to give some cushion for increasing insurance. Fortunately, we have an insurance contingency in place in our contracts now to let you back out if you do not find adequate coverage.Explore fire mitigation options such as clearing brush close to the structure, keeping tree branches pruned back, and making sure you have a defensible space around your house. |
| The Happy House Hacking Podcast Upsize or Downsize: 5 Strategies for Your Next MoveNeed to upsize or downsize? In this episode, we reveal the 5 best strategies to make your move a reality! We explore options like buying first and selling second, turning your current home into a rental, and navigating the complexities of contingent offers. Discover how to leverage your home equity, negotiate effectively, and minimize stress throughout the process. |
| Coming Soon 4 bed/4 bath Rice Ranch home in Santa Maria - $1,000,000 3 bed/2 bath on 15 acres in Atascadero - $750,000 4 bed/1.5 bath house in Lompoc - $520,000 3 bed/2.5 bath house in downtown Paso - $800,000 Current Active Listings 1981 Green St, Cambria - Multifamily Zoned 1.25 acre lot Senior Affordable Apartment project 813 Valley Rd, Arroyo Grande - 2 bed/2 bath condo in desirable Arroyo Grande Pending Listings 3860 S Higuera St #B4, San Luis Obispo - 2 bed/1 bath affordable living in SLO 3960 S. Higuera St #22, San Luis Obispo - 3 bed/ 2 bath in Creekside Mobile Home Community Just Sold 3681 Les Maisons Dr, Santa Maria - $665,000 230 Oak Hill, Lompoc - $755,000 17750 Laurel Rd, Morgan Hill - Off market sale |
| Let's Be Social Thanks so much for reading our newsletter this month! We want to hear from you! Please let us know how we can support you on your real estate journey. Whether you just purchased a new home, want to explore home-buying options, are curious about what your property might be worth, or just want to know more about the market, please reach out! @theschwaegerleteam @your.realtor.slo @kylereis70 You can also follow us on YouTube and Facebook for more updates throughout the month. The Schwaegerle Team donates 2.5% of all transactions to Dream Makers. Thank you for helping make dreams come true for terminally-ill adults in SLO County! |
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