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July 17, 2017

San Diego Residential Real Estate Market

by Bob Schwartz

San Diego Residential Real Estate Market

2017 San Diego real estate market forecastSan Diego County Residential Real Estate Market Analysis: 2nd Quarter 2017 ©2017

By Mark A. Melikian California Certified Residential Appraiser appraisals@san.rr.com P.O. Box 3051 Del Mar, California 92014 858-945-8996

The following is a market data summary of detached and attached properties as reported by the San Diego County MLS system. The data includes all zip codes in San Diego County. All projections discussed in this analysis will be updated throughout the year in subsequent quarterly reports.

Market Overview: The data provided analyzes residential real estate sales beginning in the year 2000, which is used as the base year. The number of sold listings in San Diego County peaked in 2003 at 42,746 units and decreased through 2008 to 23,972 units. Based on data from the first two quarters of 2017, the projected total number of units sold for the year will be 34,888, down from 36,236 sales in 2016 (see Figure 1).
San Diego Residential Real Estate Market

San Diego real estate marketMarket Overview: The monthly absorption rate (number of units sold in a month) will mirror the trend we see in the number of sold listings. The peak monthly absorption rate occurred in 2003 with 3,562 units selling per month. In 2008, the monthly absorption rate decreased to a low of 1,998 units. Based on data from the first two quarters of 2017, the projected monthly absorption rate for the year will be 2,907 units, down from 3,020 units in 2016 (see Figure 2).

San Diego Residential Real Estate MarketMarket Overview: Based on data from the first two quarters of 2017, the mean sold price for a housing unit in San Diego County is currently at $686,887. This would surpass the previous peak, established last year at $646,201 (see Figure 3).

San Diego Residential Real EstateMarket Overview: The mean number of days a property was on the market in San Diego County was 35 in 2016. In 2011, that number peaked at 79 days on market. Based on data from the first two quarters of 2017, the projected mean number of days will be 30, below last year’s mean number of days (see Figure 4).

San Diego Real Estate MarketDetached Housing Market Specifics – 2nd Quarter 2016 compared with 2nd Quarter 2017: Detached home sales data for the 2nd quarter of 2017 shows the highest number of sales were in the $400,000-$500,000 price range (1,445 units). The highest number of sales for the 2nd quarter of 2016 were in the same $400,000-$500,000 price range (2,171 units – see Figure 5).

San Diego Real Estate Market outlookAttached Housing Market Specifics – 2nd Quarter 2016 compared with 2nd Quarter 2017: Attached home sales data for the 2nd quarter of 2017 shows the highest number of sales were in the $300,000-$400,000 price range (994 units). The highest number of sales for the 2nd quarter of 2016 were in the same $300,000- $400,000 price range (1,278 units – see Figure 6).

San Diego 2017 Real Estate Market outlookDetached and Attached Housing Market Specifics – 2nd Quarter 2017 Housing Supply: Normal residential real estate markets typically have a three to six-month supply of housing inventory. Based on 2nd quarter 2017 absorption rates, current supply levels for detached properties are at, or below, normal market levels in all price ranges except in the $1,500,000 plus price range. Current supply levels for attached properties are also at, or below, normal market levels in all price ranges in all price ranges except in the $1,500,000 plus price range. (see Figure 7).

San Diego Real Estate Market forecastSan Diego Residential Real Estate Market

Comments and Outlook: Based on data from the first two quarters of 2017 in the San Diego County housing market, sales prices will increase (at the current pace, the year over year price increase would be 6.3 percent). Sales volume, absorption rates and days on market will decrease. (See Figures 1, 2, 3 and 4).
Inventory levels continue to decrease across all price ranges and property types. This will likely lead to the reduced sales volume and further price increases.

The highest concentration of detached housing sales continues to be inventory priced below $500,000 (see Figure 5). Similarly, the highest concentration of attached housing sales continues to be inventory priced below $500,000 (see Figure 6). Most sales activity continues to remain in these relatively lower price ranges, which is largely comprised of entry level housing in San Diego County.

Housing supply is below normal levels in most price ranges which will likely continue a competitive environment for buyers during the third quarter of 2017, assuming interest rates remain relatively constant. Many real estate professionals continue to report multiple offers on entry level listings with a continuation of a two-tiered market: Multiple offers are being reported on fixer properties which have the potential for renovation and resale. Multiple offers are also being reported on renovated houses that are priced competitively. Subsequent reports will continue to analyze the trends in local housing supplies, sales volume, and sales prices.
Here is Mark’s 1st. quarter 2017 San Diego real estate analysis

June Case-Shiller Home Price Index

 

 

San Diego Residential Real Estate Market

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