What’s Happening With the San Diego Market
The San Diego market being hot would be an understatement. The foreclosure market has seen a significant drop in the last year by a significant 58%. The REO market is nearing the end of it’s run. With short sales becoming supposedly “easier” to accomplish, more underwater sellers are opting to save their credit and go the route of the (hair pulling on the part of the real estate agent) short sale. Some are even able to refinance and stay in their home. We are also seeing an increase in standard (traditional) sales out pacing short sales by 13%.
Looking at the graph below take note of the median asking price, median in escrow price and the actual median close price. This disparity shows the reality between what a seller wants to sell for and where the median buyers price point is. Seller Hint: Price your home a little under market value and see demand drive the price up. When you are using this strategy be sure to check comparable sales in the area on your property before accepting an offer as your home will need to appraise in order to close if the buyer is using a loan to procure the property. Buyer Hint: When you see a home priced aggressively as suggested in the seller hint above be sure to write the cleanest and your highest and best offer. Of course make sure not to overpay for the property.
The Ratio of Supply to Demand measures the number of units of supply relative to the number of units closing per month. All other things being equal, the smaller this number, the tighter the area market. Yellow formatting signals relatively tight markets. Weeks Supply Given Demand is the absorption rate (the number of weeks required to exhaust current supply given current demand).
During the last 13 month period, San Diego has experienced a positive trend of median prices (+$2078) and average prices (+$2050). With supply down the demand for homes is surging. Prices are firmly positive overall with areas of weakness being seen in South Coastal and the Back Country. The tightest market is North Inland. We are seeing mild and lower price points are on the increase. You can see the evidence of this when you Consider the Ratio of Supply to Demand. There is a very tight REO and Short Sale Market where there is an excess of demand over supply. We can expect this tightness to continue in concert with continued price weakness centered in higher-end inventory. All of these conditions are good for continued price advances.
If you would like detailed information on what is happening in your San Diego County community, feel free to call or if you would like the market statistics to show up in your mailbox let me know, I would be happy to assist you. Feel free to contact me at 619-405-7673 or email me at Homes@LivinInSD.com
Other Real Estate News
On the national front many analysts are calling housing a bright spot, particularly during the second quarter.
Lawrence Yun, NAR’s chief economist stated, “The housing market is clearly superior this year compared with the past four years. The latest increase in home contract signings marks 13 consecutive months of year-over-year gains.”
Columnist Kevin Mahn for Forbes writes that “an improving housing market is critical for consumer confidence, and the economic recovery overall, as home equity still accounts for over 16 percent of household net worth” (according to Federal Reserve data as of the end of the second quarter of 2010).
Source: “Will Housing Lead A U.S. Recovery?” Forbes (Aug. 27, 2012)
Below are the lowest and highest closed sales during the month of July in the all of San Diego County.