Buyers: April Fools’ Day has passed so I’m very serious when I tell you that buying activity has continued to climb as many people chase these dropping prices. The greatest demand is in the lower price ranges, where homes are selling for less than $350,000. For every offer I wrote in March, my clients were competing with multiple offers from competing buyers. Successful sales often required offers above the listed price. This type of activity signals a possible bottom, to at least the “starter-home” market. Conservative investors still see this market declining another 10%, but buyers who take advantage of the very low interest rates and tax incentives may not be affected in the long run. You can view all homes for sale, including foreclosures, online at SanDiegobythesea.com If you know anyone who is thinking about buying, please let me know how I may be of assistance.
Sellers: As our local real estate market goes, it seems like we may be slightly ahead of much of the country in the market cycle due to the national demand for San Diego property. Much of my current business consists of clients that have either lived or visited San Diego in the past and now want to return. This phenomenon has helped similar “sun belt” locations recover more quickly than other areas throughout our nation. My current listings have received large numbers of showings and have commonly received offers within the first 30 days, if not within the first week. Visit SanDiegobythesea.com to see how I will sell your property. If you know anyone who is thinking about selling, please let me know how I may be of assistance.
Housing market still 6th-most distressed
County prices are falling steadily, key survey says
San Diego Union-Tribune - April 2009
San Diego County continues to rank as the sixth-most distressed housing market in the country, a much-watched survey showed yesterday.
But the Standard & Poor's Case Shiller Home Price Index of 20 key markets also showed San Diego prices falling at a steady pace, while price declines in some other markets continue to accelerate.
The index for January showed San Diego single-family resale homes down 2.6 percent from December and 24.9 percent from January 2008, both a bit higher than a month earlier but within the range maintained since last summer.
Meanwhile, Phoenix, down 35 percent year-over-year, ranks as the biggest loser in January. It is followed by Las Vegas, down 32.5 percent, and San Francisco, down 32.4 percent. Overall, the 20 markets were off 19 percent, a new record.
“There are very few bright spots that one can see in the data,” David M. Blitzer, chairman of S&P's index committee said in a statement. “Most of the nation appears to remain on a downward path.”
For San Diego, the Case-Shiller findings contrast with emerging signs that the housing market could be hitting bottom. For instance, sales have been growing rapidly in recent months, inventories of unsold homes are dropping and buyers are responding positively to lower interest rates and tax incentives.
But mortgage broker and San Diego State University real estate lecturer Mark Goldman said he looks at different indicators to determine if prices are likely to keep falling.
“I'm watching income, employment and household formation, which are more involved with the determinants of demand,” Goldman said.
He said reports of overbidding and multiple offers on homes selling for less than $350,000 signal a possible bottom to the starter-home market. This is also the market Case-Shiller identified as having fallen the most, down 49.5 percent from the peak set in mid-2006.
Meanwhile, the top end – homes priced higher than $419,143 – has dropped only 32.6 percent since the peak that same month. But Goldman predicted that segment is likely to fall a little faster as troubled business owners sell their homes at a loss or sizable discount.
The middle tier – between $284,375 and $419,143, – is down 38.6 percent from its peak set in November 2005. Overall, the index shows San Diego homes have fallen 40.8 percent from the late-2005 peak, compared with the 29.1 percent drop for all 20 cities on the Case-Shiller index.
San Diego's index is now back to where it was in the summer of 2002.
The Case-Shiller index, which market watchers favor because its same-home sales survey is less volatile than median prices, uses an index value set at 100 for each market for January 2000. As prices rise, each index increases accordingly.
During the housing boom, San Diego prices rose farther than in many other places. The index for the county rose to a peak 250.34 in November 2005, compared with the 20-city index that topped out at 205.86 in May 2006. In other words, while all cities as a whole rose to just over double their January 2000 prices, San Diego rose to just over 2 1/2 times its base index.
Now there are only 1.85 points between San Diego and 20-city index, compared with the record 59.9-point gap reached in October 2004.
Looking to the future, some economists expect a further pickup in sales this spring, but remain troubled by the continued flood of low-cost foreclosures put up for sale by lenders. In San Diego County, 52.2 percent of resales in February involved homes foreclosed on in the previous 12 months.
“Foreclosures are weighing heavily on prices,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Said SDSU's Goldman: “We have more bleeding-off to do.”
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