San Diego Union-Tribune - January 29, 2011San Diego County housing in 2010 paused on the way to recovery, as sales dipped and prices rose by almost exactly the same percentage for the second year in a row. The overall median for the year stood at $330,750, 6.7 percent higher than in 2009, as sales dropped by 6.3 percent to 36,829.
--Breaking down 2010 home prices, sales by geography
--Breaking down 2010 home prices, sales by key neighborhoods
But the trend wasn’t uniform across the region or by price category.
Two out of three ZIP codes in San Diego County last year saw increases in median-home prices, up from about half last year, show numbers from DataQuick Information Systems, a San Diego-based research firm.
Homes at both ends of the price spectrum were winners and losers last year. Less-expensive inventory generally experienced the biggest jumps in median price from 2009 to 2010 but dipped in sales, while pricier homes were hot sells but fell in median price.
Homes in Logan Heights, Escondido South (92025) and Spring Valley — priced between $156,000 to $265,000 — increased the most in median price from the year-earlier period in combined sales probably because prices in those areas have bottomed out, some industry experts say.
On the flip side, total sales in those neighborhoods fell between 8 percent to 27 percent year-over-year, likely because of declining inventory, an ongoing struggle for the county.
The inverse dynamic was evident among higher-end homes. Coronado, Solana Beach and Rancho Santa Fe — in the $1 million to $1.9 million range — were among the top ZIP codes with the largest increases in combined home sales.
Experts suspect they were hot zones because sellers finally gave in and cut prices.
In Rancho Santa Fe, single-family resale median prices dropped 11 percent in 2010 from 2009; Solana Beach’s single-family median price slipped 2.2 percent. Coronado actually posted an 8.4 percent gain.
Interpretations of last year’s figures vary. The region’s market is either slowly emerging from the worst downturn in the post-World War II period or it is facing a mild “double dip” in prices on the horizon, experts say.
So far, 2010’s median price has bounced up from its overall low of $310,000 in 2009 but remains 33.9 percent below the all-time peak of $500,000 in both 2005 and 2006 for all homes combined.
Most forecasters expect prices to stay flat this year, as the overall economy and job market struggle to grow. Interest rates also are expected to play a part in the housing picture. If they rise unexpectedly, that could choke off buying and lead to lower prices.
Concurrently, many experts expect a new wave of distressed properties to enter the market and drive down prices. If that occurs, it could prompt a double dip on a national level.
IHS Global Insight, a Massachusetts economic analysis firm, expects a 5 percent to 8 percent decline in prices nationally this year.
The Union-Tribune’s EconoMeter panel of eight economists predicts that San Diego prices will end the year as much as 5.1 percent up or as much as 2.1 percent down from the December 2010 median.
Given this uncertainty, home builders continue to show reluctance to start many new projects, and homeowners who don’t have to sell remain on the sidelines.
“We created over 20,000 jobs and built less than 3,300 housing units,” said Sherman D. Harmer Jr., president of Urban Housing Partners. “We underbuilt the market … That will create future price pressures. It’s Economics 101.”
However, the latest household job survey still showed county employment at nearly 60,000 below the pre-recession level, meaning housing demand remains weak, at least for now.