San Diego housing sales in September had a slight - about 2% - increase versus August. Sales for September were also down about 2% versus September 2008 but were up significantly versus September 2007 and 2006. The largest decline in sales has occurred with bank owned (foreclosed) properties which have declined 19% from July. However, more importantly when looking forward, the selling activity - pending and contingent sales - was lower than August by about 12% which will lower sold levels in the next few months. After the selling activity decline from May to June selling activity was increasing by about 2% per month through July and August. The decline is sales activity could be caused by a number of factors including seasonality, the end of the tax credit program for first time buyers and the substantial price increases that have taken place this year.
While selling activity has declined the inventory of home for sale in San Diego have declined as well, this decline has caused the months supply to decline from 2.7 months in August to 2.3 months in September. The decline in sales for foreclosed properties is caused by the decline in inventory resulting in a 2 to 3 week supply. The decline in the months supply is important because it will keep upward price pressure on San Diego home prices. For homes priced below $400,000 there is less than 1.4 months supply causing multiple offers to be the rule of the day.
The high demand relative to the housing supply has caused double digit price increases this year, it is important to remember that this varies by neighborhood and home size. For example an approximately 1000 sq ft detached home that sold for $202,000 in January sold for sells for $236,000 in September, a 17% increase. We see this pattern to varying degrees across the market except at the higher end where price decreases are still more prevalent. Prices are increasing in all types of sales - foreclosed homes, short sales and regular sales - indicating that the upward pressure on prices is uniform across the market except for the higher priced end of the market where months supply is still in double digits.
There is beginning evidence that increased prices are resulting in reduced demand. The largest decline in sales has occurred with FHA buyers since the spring. For the first 5 months of the year 53% of FHA home purchases were detached homes and for the past 4 months it has shifted to 54% of FHA purchases were condos. While prices have increased for both detached and condo homes, condos have a substantially lower price point. It appears that as FHA buyers get priced out of the detached home market they drop down to the lower priced condo market and those that were in the condo market and get priced out then drop out of the housing market. It is important to note that the sales growth in the San Diego market has largely come from FHA buyers. In 2007 FHA made up 0.7% of the San Diego market and it is now in the 30% region.
Moving forward, the upward price pressures will remain on the San Diego housing market until events cause the demand and supply relationship to move the months supply up to at least the 4 month level.
For more details visit my website www.fidelitypacificrealestate.com
Data from Sandicor is deemed reliable but not guaranteed.
Approximate Location Boundaries: San Diego County
Location Characteristics: encompasses all of San Diego County
About Bob Casagrand:
As a Real Estate Consultant I serve both Buyers and Sellers with the goal of 'sell for more buy for less'. For Buyers, my Preferred Buyer Program provides you with the tools, information, guidance and council to assist you in making the buying decision that best meets your goals. For Sellers, my Magnetic Home Marketing System will market your home to be sold not just list your home for sale, with the objective of 'selling faster for more money', even in today’s market. Oh yes, for those of you that sell and buy your home from me I have a Total Value Program, which gives you the best of all worlds. For more details on any or all of these programs just e-mail your request to me at bcasagrand@searchinsd.com
In this transition market, if you are looking to buy or sell a home now or even 6 months or more away there are a couple of things you should do. Remember, information is the key to wise decision making. First, you should sign up for the home locator program on this website. The up-dates on new listings will keep you current on what is available on the market. For Buyers this will the opportunity to see the new listings as they happen and for Sellers you will be able to see what is going on with competing homes. Of course, I am only a 'click' away from being of assistance to you on any questions you may have about a specific property or the market in general. Second, you must keep up-to-date with current market trends; unit sales, average price and interest rates. The perfect tool for you to do this with is the premier real estate newsletter, Realty Times. This newsletter has daily up-dates on interest rates, a library of buyer/seller relevant articles and once a month a Market Trend analysis of San Diego and various neighborhoods. The beauty of this newsletter is that if the neighborhood of interest to you is not included I can add it to out list. To get your free subscription to Realty Times just e-mail your request to me at bob.casagrand@gmail.com .By using these two tools you will be current with the market and it's trends, this will enable you to make the best buying and selling decisions of the most valuable asset you will ever have.
These reports reflect the views and opinions of their authors and are not necessarily the views and opinions of Realty Times.
