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.
Lower SoCal home prices lead to sales spike
Union-Tribune - January 19, 2009
With prices down 34.6 percent due to low-cost foreclosures, sales in Southern California rose 50.5 percent in December, MDA DataQuick reported Monday.
The overall median for the six-county area stood at $278,000, down from the year-ago level of $425,000. As previously reported, San Diego County's median was $300,000, off 30.2 percent from $430,000 in December 2007.
The starkest examples of the divergent sales/price trend lines were in Riverside and San Bernardino counties. With prices down 41.1 percent and 42.9 percent, respectively, sales skyrocketed 77.2 percent in Riverside and 88.5 percent in San Bernardino. The respective median prices were $209,000 and $180,000.
Orange County's median price dropped 29.7 percent to $397,000, as sales rose 49 percent. Los Angeles County's median was down 31.9 percent to $320,000, and sales rose 32 percent. Ventura's median declined 35.6 percent to $338,000, as sales increased 48.5 percent. San Diego sales totaled 3,325, up 34.7 percent from December 2007.
In a continuation of trends noted for some months, homes foreclosed in the previous 12 months represented a record 55.7 percent of the resale market in December, up from 54.7 percent in November and 24.3 percent in December 2007.
Riverside represented an extreme case of foreclosure dominance, with just less than 70 percent of resales being foreclosures. Usually sold at deep discounts, these resales helped nearly triple the resale count in that county.
For San Diego, foreclosure sales actually declined as a proportion of resales, going from 52 percent in November to 50.4 percent in December.
The new housing market did not participate in the sales rally, DataQuick found. Only 1,813 newly built homes and condo conversions sold in December in the six-county region. That compares with the 21-year average for the month of 4,926 and the record 8,723 in 2005.
For San Diego, it also was a record low December for new homes with only 321 units sold, down from 873 in 2007 and the all-time peak of 1,769 in 1988. Since that year, 11 Decembers have had sales counts exceeding 1,000 and 10 have had less.
“The builders are in a holding pattern, staying alive until the market recovers,” said DataQuick President John Walsh.
Besides low prices, low interest rates apparently are fueling sales. The most recent Freddie Mac mortgage interest rate survey showed that the average for a 30-year, fixed-rate loan was 4.96 percent with 0.7 percent in points.
Consequently, DataQuick found, the typical monthly mortgage payment on homes sold regionwide in December was $1,239, down from $1,380 in November and $2,060 in December 2007. After adjusting for inflation, current payments were 54 percent below the peak at the height of the real estate boom in July 2007.
Not only are buyers benefiting but current owners also have awakened to the new lending environment, if they have enough equity to qualify to refinance their mortgages.
One example is Carol Wertz of San Marcos. She said she put more than 50 percent down on an $838,000, 2,800-square-foot home in February 2006 and took out a 30-year, fixed-rate loan at 6 percent.
She figures the value of her house has dropped to $600,000 or less. But she retains enough equity to refinance at 4.3 percent with a loan from Pacific Community Credit Union after paying one point in origination costs. She stands to shave about $355 off her roughly $2,000 monthly mortgage.
“With the economy (deteriorating) and softness in the job market, I didn't want to lock into a higher payment,” said Wertz, who works at a Torrey Pines biotechnology company.
She passed on a 15-year loan, figuring she will voluntarily pay more in principal so she can retire her loan early.
“Personally, I think this is kind of scary,” she said of current conditions. “I know we have to get to a floor in the housing market, but I think we're just in uncharted waters, really.”
With prices down 34.6 percent due to low-cost foreclosures, sales in Southern California rose 50.5 percent in December, MDA DataQuick reported Monday.
The overall median for the six-county area stood at $278,000, down from the year-ago level of $425,000. As previously reported, San Diego County's median was $300,000, off 30.2 percent from $430,000 in December 2007.
The starkest examples of the divergent sales/price trend lines were in Riverside and San Bernardino counties. With prices down 41.1 percent and 42.9 percent, respectively, sales skyrocketed 77.2 percent in Riverside and 88.5 percent in San Bernardino. The respective median prices were $209,000 and $180,000.
Orange County's median price dropped 29.7 percent to $397,000, as sales rose 49 percent. Los Angeles County's median was down 31.9 percent to $320,000, and sales rose 32 percent. Ventura's median declined 35.6 percent to $338,000, as sales increased 48.5 percent. San Diego sales totaled 3,325, up 34.7 percent from December 2007.
In a continuation of trends noted for some months, homes foreclosed in the previous 12 months represented a record 55.7 percent of the resale market in December, up from 54.7 percent in November and 24.3 percent in December 2007.
Riverside represented an extreme case of foreclosure dominance, with just less than 70 percent of resales being foreclosures. Usually sold at deep discounts, these resales helped nearly triple the resale count in that county.
For San Diego, foreclosure sales actually declined as a proportion of resales, going from 52 percent in November to 50.4 percent in December.
The new housing market did not participate in the sales rally, DataQuick found. Only 1,813 newly built homes and condo conversions sold in December in the six-county region. That compares with the 21-year average for the month of 4,926 and the record 8,723 in 2005.
For San Diego, it also was a record low December for new homes with only 321 units sold, down from 873 in 2007 and the all-time peak of 1,769 in 1988. Since that year, 11 Decembers have had sales counts exceeding 1,000 and 10 have had less.
“The builders are in a holding pattern, staying alive until the market recovers,” said DataQuick President John Walsh.
Besides low prices, low interest rates apparently are fueling sales. The most recent Freddie Mac mortgage interest rate survey showed that the average for a 30-year, fixed-rate loan was 4.96 percent with 0.7 percent in points.
Consequently, DataQuick found, the typical monthly mortgage payment on homes sold regionwide in December was $1,239, down from $1,380 in November and $2,060 in December 2007. After adjusting for inflation, current payments were 54 percent below the peak at the height of the real estate boom in July 2007.
Not only are buyers benefiting but current owners also have awakened to the new lending environment, if they have enough equity to qualify to refinance their mortgages.
One example is Carol Wertz of San Marcos. She said she put more than 50 percent down on an $838,000, 2,800-square-foot home in February 2006 and took out a 30-year, fixed-rate loan at 6 percent.
She figures the value of her house has dropped to $600,000 or less. But she retains enough equity to refinance at 4.3 percent with a loan from Pacific Community Credit Union after paying one point in origination costs. She stands to shave about $355 off her roughly $2,000 monthly mortgage.
“With the economy (deteriorating) and softness in the job market, I didn't want to lock into a higher payment,” said Wertz, who works at a Torrey Pines biotechnology company.
She passed on a 15-year loan, figuring she will voluntarily pay more in principal so she can retire her loan early.
“Personally, I think this is kind of scary,” she said of current conditions. “I know we have to get to a floor in the housing market, but I think we're just in uncharted waters, really.”
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