County home prices continue slow climb…”Bull’ish” sales for the Fall Season?
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July sales up 11% from a year earlier
Everyone ask me “How is the San Diego Real Estate Market doing?” Encouraging?
Please read the article as reported by: Union-Tribune Staff Writer, Roger Showley on August 18, 2009.
San Diego County home prices continued their cautious comeback last month, clocking in at a median of $320,000, up from the recession’s low of $280,000 in January.
Sales passed the 3,800 mark for the first time in three years, indicating buyers are increasingly motivated to grab bargains while they last. The number of sales last month marked an 11 percent increase from a year earlier.
But analysts caution that while the market may have reached bottom, they do not expect a return to rapid appreciation anytime soon.
“Overall, prices still appear soft,” MDA DataQuick analyst Andrew LePage said. “They’re not plunging anymore, but I also don’t see them climbing consistently month over month in most areas. When they climb, it’s pretty minor. They’re flat, at best, in most cases.”
A big reason the median is rising is that a larger share of transactions involve move-up homes priced above $500,000, LePage said. That price range represented 27.9 percent of sales last month, up from a recent low of 17.5 percent in January.
Meanwhile, the share of resale homes sold that had gone through foreclosure in the previous 12 months dipped to 37.4 percent, compared with the January peak of 55 percent.
An indication that prices remain largely flat is the price per square foot. For example, in the North County coastal zone, after subtracting Oceanside, the price per square foot has remained at $312 for the past few months.
Longtime real estate executives said move-ups are not strong when compared with the demand for lower-cost, first-time properties.
“There’s such a flurry of first-time, renter buyers and investors coming back in,” said Stephen Rodgers, president and owner of Exclusive Properties. “We’re seeing an immense number of multiple offers, 60 to 70 offers on one property, but more an average of five to 12. The great challenge right now in the marketplace is there’s just no inventory.”
According to the San Diego Association of Realtors, yesterday’s inventory of active listings stood at 8,889, a 2½-month supply at July’s resales pace. At this time last month, the inventory was 13,268.
But Erik Weichelt, association president, said the listings have declined partly because of a change in definition. In cases where lenders have to approve a short-sale, those properties are now considered as contingent sales and no longer count as active.
“It still means we don’t have enough inventory,” Weichelt said. “We’ve got to get more inventory.”
But with prices down 38 percent from the 2005 peak, nondistressed owners apparently are not seeing this as an opportunity to sell.
“A lot of people don’t want to sell because the price is so much lower than it was a few years ago,” said Gary Kent of Re/Max Associates. “What we’re seeing is people who need to sell or have owned a long time.”
Peter Dennehy, senior vice president of Sullivan Group Real Estate Advisors, said the housing market continues to labor under tighter underwriting standards.
“Buyers are very picky, as well they can be, because banks will be picky with them,” Dennehy said. “It’s a tale of two markets. You can’t say overall it’s a good time for sellers to sell.”
In recent months, agents report, many renters have been enticed by an $8,000 federal tax credit available to first-time buyers. An add-on program California offered for new-home buyers has expired, and the federal effort is to end Nov. 30. There is discussion of extending both, but no action has taken place.
More important, Dennehy said, is whether the economy and the local jobs picture improve enough to boost the confidence of buyers.
“A lot of things have to fall into place before we can see the overall direction,” he said.
Union-Tribune
