Another beautiful month of May in San Diego and the local real estate market has continued the steady improvement it has experienced for some time. What follows is a statistical summary of activity in our area based strictly on the number of listings and new sales which we feel is the most accurate barometer of current activity. We do not report closed sales because many of them went into escrow several months ago and may not reflect what is happening now. The numbers include all of San Diego County but can be adapted to any local area of interest.
Detached homes: There are now 6,547 detached homes on the market, up from 6,196 last month, an increase of about 5%. 2,235 new escrows were opened in April, up from 2,071 in March, an improvement of about 8%. The fact that the number of new escrows increased at a faster rate than the number of new listings reduced the months of supply from 3.0 last month to 2.8 now. Anything under about 6 months is considered to be in the seller's favor, so prices are rising. Most of this strength, however, is in lower price ranges because there is huge demand by investors for those properties. Financing options in the higher price ranges are still not great and this is inhibiting move-up buyers. In addition to the 2,235 new escrows that opened in April 2,539 more homes went "contingent" (short sales that went under contract awaiting lender approvals). When you add the new escrows and the new contingents we see that 4,774 properties left the market under contract in April leaving us with 0.77 months of inventory in detached homes. This means that the entire inventory clears the market about every 3 weeks. It should be noted that some of the new "contingents" become new "pendings" in the same month as lenders improve their short sale processing.
Attached homes: 3,215 attached homes are now on the market vs. 3,022 a month ago, an approximate 7% increase. 1,210 new escrows opened in April vs. 1,154 in March, an increase of about 4%. This left us with a supply of about 2.5 months of inventory vs. 2.6 last month. This means prices are on the rise due to the low supply levels. When we add the 2,011 other homes that went "contingent" in April the supply is reduced to 0.67 months (2-3 weeks).
Note of caution: Anyone buying or selling a home should have me run this analysis for the neighborhood and price band of interest as homes on the high end of the scale can not be priced as aggressively as lower priced units and buyers can adjust their offers to match their specific product target.
