The San Diego real estate market can be broken down into six distinctive regional markets – Central San Diego, Central San Diego Coastal, East County, North County Inland, North County Coastal and South Bay. See what communities make up each region. Each of these real estate markets have their own somewhat unique market characteristics. Whether you are buying or selling a home in San Diego you should be knowledgeable about the regional market trends because they will impact what you sell your home for and the purchase price you will pay when buying.

Overall the San Diego real estate market declined in sales by about 13% from October to November. Each region experienced sales declines ranging from a high of 24% for Central San Diego and a low of 10% for North County Coastal. The October to November sales decline is in line with prior year sales declines for the same period, leaving one to conclude that this is a normal seasonal sales decline. Looking at the sales decline by price range we also see a broad based decline across all price ranges, another indicator of a seasonal adjustment.

Distress sales – foreclosures and short sales – have been an important component of the San Diego real estate market for the past couple of years. Again in this market component we see very different patterns by region, with the coastal areas having a low distress component and South Bay having a large distress level. The concentration of foreclosures and short sales affect the pricing structure of the region with higher concentrations putting more pressure on prices. In the recent past we have seen declines in foreclosures for sale as well as sold foreclosures. Since foreclosures are the lowest priced homes on the market this would explain partially some of the recent price trends.

After demand, the important supply issues come into play to profile a market. Months supply defines the market dynamics between buyers and sellers. For November regional months supply ranges fro a low of 1.6 months for South Bay and a high of 5.9 months for Central San Diego Coastal. This range of months supply indicates that the regional markets are in the range of sellers market to a price neutral market. However, macro numbers do not tell the whole story. Price points are the market driver today and what we see is that homes priced under $200,000 have a 1.4 months supply and homes over $1 million have a 17.5 months supply. So to understand each regions demand/supply position you would need to breakdown the region by price range. One indicator of whether a regions inventory is reasonably balanced by price to reflect the demand affordability is days on market and the sold list price/inventory list price ratio. The two regions whose inventory is best balanced with demand are Central San Diego and South Bay. They have the smallest differential between inventory days on market and sold list/inventory list ratios. The difference between the dom for sold and inventory is about 1.3 times and the sold/inventory ratios are about 75%. The rest of the regions have DOM differences between the sold and inventory of almost double and the difference the sold list price is about 50% of the inventory list price. This shows that much of the inventory is priced out of the buyer affordable range and means that buyers are chasing fewer homes than the inventory would indicate. In essence the “effective” inventory is much smaller than the actual inventory. This helps explain the multiple offer situation and why price increases are occurring.

San Diego year over year price trends vary by region. North County Coastal, North County Inland and South Bay have had price increases while the other regions had low single digit price declines. As a general statement the San Diego real estate market today has fall 2008 price levels with half the regions slightly above those levels and the rest slightly below those levels. Since early spring we have seen month over month price increases as the supply was reducing and demand was picking up. Since May of 2009 prices are up across all regions except for Central San Diego Coastal which was flat. The highest price increase during this period was in South Bay with an 11% increase. South Bay is the region with the lowest months supply at 1.6 months defining it as definitely a “sellers” market.