The San Diego real estate market had its' best, on a macro basis, December sales performance in 5 years with approximately 3,000 homes sold. Home sales less than $400,000 have substantial sales increases from the 2005/2006 period, although slightly less sales than December 2008, while the homes over $400,000 have sales gains against 2008 they are still significantly lower sales than the 2005/2006 period. The increasing sales at the lower price ranges are reflective of the price decreases the San Diego real estate market experienced over the past 2 years. The sales increase was experienced by both detached homes and condos. However, the market has had steadily decreasing pending sales for the past 3 months which shows a decline in buying activity. The recent decline in current activity could just be a seasonal item or it could reflect that the price increases this year are beginning to push buyers out of the San Diego housing market, the next couple of months should indicate which it is.
Home sales for 2009 exceeded sales for the past 4 years, only 2005 had greater sales. The growth in sales has been dominated by the increased sales in the less than $400,000 market segment. In 2009 this market segment comprised almost 70% of all sales while in 2005 it was less than 25%. The price reductions of the past few years has created a more affordable market and brought many first time buyers back into the market creating the growth in demand.
One of the major issues in the San Diego housing market is the lack of inventory to meet the growing demand. In 2008 the average months supply was just over 8 months while in 2009 the average months supply was 2.7 months. This shortage of inventory has caused multiple offer situations and "bidding wars" pushing up prices since the early spring. This applies to the market in general except for the very high end of over $1 million homes which have an excess of supply. Foreclosures were a major part of San Diego real estate in 2009 making up about 38% of total sales. However, by the end of the year foreclosures dropped to 28% of the market due to declining inventory of foreclosed properties. For the past few months foreclosure inventory has only had 2 to 3 weeks of supply for the market. Since foreclosures sell for less than other homes the reduction in the sales component of foreclosures is part of the reason for the current price increases.
We have seen substantial upward movement in prices during 2009. On average December 2009 prices are about 12% higher than the comparable period in 2008, except for high end homes which still have decreasing prices and price levels are lower than 2008. Prices continued to decline after December 2008 but the rate of decrease was getting smaller, by March/April 2009 real price increases began to occur. Since early spring home prices have increased by about 20% for most size homes. Annualized this is a 30% yearly increase which, in my opinion, is not sustainable. We have seen the rate of increase month over month begin to get smaller indicating a slowing of price increases. However, if the inventory situation remains in its' current position the pressure for increased prices will continue. The current trend of increases in interest rates and prices will slow down the demand but demand has to take a sharp drop to make a major impact on the price equation. I was just involved with a $600,000 home that had 8 offers in 2 days; this type of situation will keep prices moving somewhat upward until 7 of those buyers leave the market.
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Data from Sandicor is deemed reliable but not guaranteed.
Approximate Location Boundaries: San Diego County
Location Characteristics: encompasses all of San Diego County
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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.
