October sales for San Diego homes for sale were up about 3% from September and down about 6% from October 2008. For the past 7 months San Diego home sales have fluctuated between just over 2800 homes to 3200 homes sold, October sales fit into that pattern and are a continuation of the sales pattern. However, San Diego homes for sale selling activity - pending sales - has a 3 month trend of declining activity. September pending sales declined 4% from August and October pending sales declined 8% from September. The decline in pending sales is broad based with only homes in the $500k to $600k range having an increase in pending activity. The declining pending sale trend could just be a seasonal market adjustment or could be indicating a slow down in the market.
The inventory for San Diego homes for sale increased slightly in October from September, although still well below August inventory. Inventory below $500,000 increased while inventory above $700,000 decreased. It appears that higher priced listing have been pulled off of the market. In October about 1900 listings with an average price of $924,000 were pulled off the market while about 4200 listings with an average price of $566,000 were added to the market. One of the results of the San Diego homes for sales inventory trend is that there was a list price reduction of about 3% for the homes for sale while at the same time the list price of sold homes increased by 3%. The reduction in pending activity and the increase in inventory did not materially change the months supply for San Diego homes for sale which is 2.4 months overall. The less than $400,000 market segment has less than 1.5 months supply - sellers market - and the over $1 million market segment has double digit months supply. The over $1 million market represents 27% on the inventory for sale and only 4% of the homes sold. The imbalance between supply and demand in the high end market will keep negative price pressures in place. In order to get some rational relationship between supply and demand - in the 7 month region - the high end market needs to find an additional 160 buyers per month or reduce inventory by over 1,000 homes for sale, or some combination.
The price patterns for San Diego homes for sale are still showing overall price increases. For most home sizes the current price levels are either very close to, equal to or exceed October 2008 prices with an average overall price decline of 2%. Since March 2009 detached homes have an overall average price increase of 14% with a low price increase of 3% and a high of 30% depending on home size. This rate of price increase is similar to the past "bubble" pricing of the recent past and one wonders how long this trend can continue before pricing demand out of the market place. The shortage of San Diego homes for sale in many price ranges is causing multiple offers which are in effect bidding wars pushing up the prices, reminiscent of the "irrational exuberance" days and we know where that got us. As long as interest rates stay low keeping a reasonable level of demand, prices do not reach the tipping point of affordability and inventory stays low - home owners do not find current prices attractive to sell and lenders stall on foreclosures keeping homes out of the for sale inventory - the current price trends will continue even if the price increases do not grow in magnitude. Fannie Mae is now considering renting foreclosed homes back to the owners which will only keep more homes off the market and help keep the current shortage of San Diego homes for sale causing prices to increase. While we artificially stimulate demand and artificially suppress supply San Diego will remain in bubble pricing territory, at least for the major part of the market. While there is different stimulus being applied today versus a few years ago the end result could well be the same.
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.
