Union-Tribune - January 20, 2009
San Diego County housing prices may have tanked in 2008, but there was a wide variation among neighborhoods, MDA DataQuick figures show.
Some areas had median prices that were nearly 50 percent less than in 2007, but a lucky few actually showed price increases.
The bottom line, according to DataQuick analyst Andrew LePage, is that the neighborhoods with large price declines were fueled by a preponderance of low-cost foreclosure sales. By contrast, those areas with relatively few foreclosures suffered fewer, if any, price drops.
LePage deconstructed the North County Coastal subregion in December to show how neighborhoods with lots of distressed properties can overpower those less affected by mortgage defaults, foreclosures and panicky investors.
Last month, the north coastal median price was $375,000 for resale houses, down 41.9 percent from December 2007. But without the five Oceanside ZIP codes, with their high concentration of distressed sales, the rest of the coastal ZIP codes were down only 22.7 percent.
Solana Beach, long one of the county's more desirable coastal communities, showed surprising resilience last year, posting a nearly 25 percent increase in housing values at a time when most neighborhoods experienced sharp declines. Its increase was the highest in the county.
The median price last year for all homes in the 92075 ZIP code was $1,060,000, based on 188 sales – just 12 fewer than in 2007.
The area's unusually high price appreciation may have something to do with the paucity of distressed properties there. In November, for example, there were just two foreclosures in Solana Beach.
“Many of the people who have purchased east of the freeway have raised their families there and tend to stay there, and many of the homes on the west side are vacation and second homes that required more money down, so they couldn't get 100 percent financing,” said real estate agent Jennifer Locke, who works in the North County coastal area.
Also faring well was downtown San Diego, which saw a 7.4 percent rise in the median home price, despite the fact that there are still hundreds of new, unsold condos in the neighborhood.
Downtown, though, is something of an aberration compared with other neighborhoods because prospective buyers typically make commitments to purchase condos long before the buildings are completed.
The median price for all of last year was $522,000, compared with $486,000 a year earlier.
“There were at least three major buildings that began (escrow) closings in 2008, and those were based on 2005 and 2006 pre-sales, so they reflected the higher pricing of several years earlier,” said downtown real estate agent Greg Neumann. “The rest of the market is struggling in that area.”
Last year's success stories, though, were few and far between.
The year was the second only to 1995 as the worst since DataQuick began tracking San Diego in 1988.
That was especially true for Logan Heights, a once overlooked neighborhood that saw a meteoric rise in property values during the real estate boom, only to fall the hardest last year, when the median price sank more than 48 percent.
By comparison, in 2003, the median price for single family homes in the 92113 ZIP code soared more than 35 percent to $250,250 – the highest increase in the county for neighborhoods with at least 75 sales that year. Three years later, the median had jumped to $395,000, more than twice the neighborhood's current median of $166,500 for single-family home resales.
“A lot of the properties there aren't kept well, and that exacerbates problems when there are overall real estate declines,” said broker Kathy Davis, who works in the south San Diego area. “And when the properties don't look good, you have to lower your price.”
The worst performing subregion was North County Inland, where the overall median dropped 29.4 percent to $367,000, compared with $520,000 in 2007. Escondido's 92025 and 92027 ZIP codes dropped more than 40 percent, and Rancho Santa Fe's 92067 was the only ZIP with at least 75 sales to increase, by 2.3 percent to $2.4 million.
South County, the scene of so much foreclosure activity, ranked second with a downturn of 28 percent to $324,000 from $450,000 in 2007. National City performed poorest of all, down 45 percent to $220,000 from $400,000 the year before.
East County fell 26.8 percent to $300,000 from $410,000 with Lemon Grove and El Cajon 92020 down the most among larger ZIPs, off 38 and 36.2 percent, respectively. No communities posted any increase.
North County Coast was down 22.5 percent for the year to $465,000, from $600,000 in 2007. Central San Diego saw a 20 percent decline to $360,000 from $450,000 in 2007.
