Interest rates and prices are at extremely low levels which creates a lot of bang for the bucks. Statistics tell us that approximately 70% of the inventory in California consists of distressed properties (bank owned ready to move in, bank owned needing repair and short sales). Many homeowners that can wait for the market to improve before selling are electing to do that rather than compete with the distressed properties. Builders are reporting good activity at their very limited supply of new homes (that low supply level is due to to their caution and to the fact that we have very little buildable land left in San Diego).
Here's the summary of activity. Keep in mind that less than 5 months of inventory is considered a seller's market with rising prices, 5-7 months is considered neutral, and more than 7 months is considered a buyer's market with weak prices.
Detached Homes: As of today there are 8,495 detached homes on the market in San Diego county as compared to 8,378 last month and 5,449 a year ago. The increase of 117 over last month is modest but the increase over September 2009 levels is significant but keep in mind that last year we had exceptionally low availability. The last few months is more normal. 1,521 detached homes went into new escrows in September comparing to 1,703 a month ago and 2,117 a year ago. Another 2084 homes went "contingent" (short sales receiving seller approval but awaiting lender approvals) for a total of 3,605 homes leaving the active market, compared to 4,412 a year ago. Currently we have 5.59 months of inventory (neutral) as compared to 4.92 a month ago. This means that sellers should price aggressively to garner serious buyer interest, i.e. they can not price above the market. When we add the contingents to the pendings we show 2.32 months of supply, a strong market.
Attached Homes: As of today there are 4,086 attached units on the market as compared to 4,080 last month. 775 condos went into new escrows in September vs. 858 last month vs. 1,108 last month. Another 1,598 units went contingent for a total of 2,373 units that came off the market with accepted contracts. Based on only the pendings we show 5.26 months of supply vs. 4.76 a month ago but when we add the "contingents" back in a total of 2,273 units came off the market giving us a turnover average of 1.72 months, again a strong number.
R. Ungar, Associate Broker – Keller Williams Realty
