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July 2010 Market | Inventory | 12,101 | Up | | Inv Avg Price | $865k | Down | | Sold | 2,586 | Down | | Sold Avg Price | $429k | Same | | Pending | 2,858 | Down | | Months Supply | 4.6 | Up | |
Home Value Report - San Diego Zip Codes
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San Diego Real Estate 5 Year Sales Trends - July 2010
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The San Diego real estate market continues the trend of lower demand, higher inventory, higher months supply and reducing price increases. The reduction is sales at a time when interest rates are at  historical lows indicates that other forces are at play. The tax rebate program had the effect of pulling demand forward, home price increases over the past year could be pushing buyers out of the market and difficulty in getting loans are some of the factors creating the slow down in the San Diego market. Home sales in July were down about 20% from July 09 as well as this June. The reduction in demand is a general overall slow down impacting all price ranges, detached and condos as well as all San Diego regions. Even foreclosures have been impacted with reduced  demand that is greater than the overall market decline. Last summer foreclosures represented about 35% of sales and that has dropped to 20% in July. We continue to see an upward shift in market share for prices above $300,000, the lower than $300,000 market has lost 11 points in market share over the past year. The shift to higher prices indicates that the buyer pool demographics have changed to higher end buyers. While sales above $300,000 have improved market share in 2010 they are still well below the market share they had in 2006 – as example the $500,000 to $600,000 price range had 18% market share and now it is at 8%. The decline in market share in the upper price ranges indicates that the combination of loan programs and home prices still have these price ranges out of reach for most potential buyers. |
San Diego Real Estate Inventory and Months Supply - July 2010
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Inventory of active listings continues its steady growth since January. Inventory increased by 6% from June while pending activity declined by 7% - inventory has increased by 55% since January. Both the  inventory growth and pending decline are across all price ranges which again indicate that the overall market is in transition. The combination of inventory growth and pending decline has pushed the months supply to 4.6 months, up from 2.4 months last summer. Inventory continues to be out of phase with the buyer pool. The average list price of the inventory is $865,000 and the average list price of sold homes is $429,000. In the case of homes priced over $1 million they represent about 20% of the inventory while only being 5% of the sold homes. This skew in the inventory by price puts different pricing dynamics in play depending on the price range. Foreclosures and short sales continue to maintain an overall market share in inventory of 30% to 33% even though their market share of sold homes has reduced; however, distress sales as a component of inventory and sold homes varies greatly by San Diego region. For South Bay distress homes have a 57% market share in inventory while having over 70% of sold homes being in the distress category, while Central San Diego Coastal has a 12% distress component in inventory and a 23% distress component of sold homes. |
San Diego Real Estate 5 Year Price Trends - July 2010
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The price picture for San Diego real estate is quite different in 2010 from 2009. While 2009 experienced significant price increases, 2010 the beginning of 2010 experienced a reduction in price increases and  by the June/July period some prices have begun to decline. The new price picture is being caused by the increase in inventory and the reduction in demand. Part of the demand picture flies under the radar because it is not measurable; in 2009 multiple offers were the rule and caused the effect of bidding wars. In 2010 there has been a significant reduction in multiple offers taking some of the bidding out of the market place reducing pressure on prices.  While we see across the board by home size price increases July to July the month to month price changes are showing a downward trend.
 We are even seeing the price gap between foreclosures, short sales and regular sales closing.
 Even though the San Diego market is still about 30% below peak prices, the market still seems to have an affordability issue which impacts demand negatively. Even in 2009 the demand was 35,000 homes sold, well below the peak sales years. The major issue that pushed prices up was the lack of overall supply and now that has changed. In order for San Diego to have steady growth out of the problems of the past few years home prices have to reasonably match community income otherwise we will continue to have these burst and bust cycles. We expect 2010 to continue on its current trend of slowing demand, increasing inventory and increasing months supply for the balance of 2010, assuming there will not be any more government intervention. |
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