San Diego Home Values Drop Over 30%
MDA DataQuick just reported median price of all homes sold fell nearly 6 percent from October to November, dipping to a 6-1/2 year low to $305,000. Since November 2007, the median price of all homes sold was off more than 30 percent. Plus, the median price was off more than 41 percent from the market peak of $517,000 in November 2005.San Diego Real Estate to Drop 20% in 2009?
With the industry talk of a possible San Diego bottom to the real estate market, is now the time to buy San Diego homes? It’s very possible they are correct! Who can really say? Everyone likes to be optimistic. With three years of a falling San Diego real estate market and home values that at 40 to 50% off their 2005 market highs ,we might see a market turn in 2009.
Sadly, I have my personal doubts on a significant San Diego real estate market reversal in 2009. I sincerely hope I'm wrong on this, and there is, in fact, a rebound next year.
Though it's not talked about much, there is another huge number of homes that may be newly heading into foreclosure which may accelerate the housing value decline. (There is a large number of regular adjustable loans resetting next year – for more information read: (Jumbo Financing and the Impact on The San Diego Real Estate Market.) If this occurs in the numbers forecast, San Diego home values could be down another 20-30% in 2009.
So, is it correct that if you buy today and plan to hold for at least five years you'll come out way ahead? Being just a local San Diego real estate broker and not an economist, I really cannot answer this question with any conviction. All I will say is that my three decades of real estate experience, and knowledge of the San Diego housing market, I can assure my clients that I will endeavor to achieve the best possible value, buying or selling, San Diego homes.
Prior related posts:
San Diego Real Esate Sales Increase
San Diego Condominium Sales Price Appreciation
29% of Homeowners Have Larger Mortgage Than Home’s Value
Real Estate Record Home Price Declines
San Diego Real Estate – 5th Largest Decline Through July
Southern California Home Prices Drop 34% in August
San Diego California Home Sellers Lose Big
The San Diego California Real Estate Great Depression
Yale Professor … House Price Decline Could Be Worse than Great Depression
Survey Says Home Values Must Fall Another 14%
California Home Sales Up 43.4% – Home Prices Down 40.3%
Home Value Loss … Homeowner Perception vs. Reality
San Diego CA real estate agents
San Diego Real Estate – Recovery or Collapse?
The Doom & Gloom scenarios seem almost universal – indicating that perhaps the worst has already been discounted. Don't expect any 'instant' clearly defined bottom. It's going to take months, many months, before a real bottom is established.San Diego Real Estate – 5th Largest Decline Through July
San Diego California home values showed the 5th largest decline for the latest July 2007 to July 2008 S&P/Case-Shiller Home Price Indices.
“There are signs of a slow down in the rate of decline across the metro areas, but no evidence of abottom” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Little positivenews can be found when cities like Las Vegas and Phoenix report annual declines as large as -29.9% and
-29.3%, respectively, and all 20 cities are still in negative territory on a year-over-year basis. The Sunbelt
continues to be the story, with the seven cities that basically represent that area reporting annual declines
roughly between 20 and 30%. While some cities did show some marginal improvement over last month’s
data, there is still very little evidence of any particular region experiencing an absolute turnaround.”
The table below summarizes the results for July 2008. The S&P/Case-Shiller Home Price Indices are revised for the 24 prior months, based on the receipt of additional source data.
Emergency Rescue Package – The Devil’s in The Details
Is this a mess or what?
You live in a San Diego new housing development where all homes were sold out in 2004. You and your neighbor paid $750,000 for your identical homes. You have been paying your mortgage on time, but your neighbor is facing foreclosure. As we all know, most San Diego home values are way down from their 2005 highs. So, let's say the homes in this example are now worth $525,000 each. What happens when your neighbor gets his loan modified to $525,000 simply because he can’t afford his house?
Actual clause in the government rescue package:
Sec. 109. Foreclosure Mitigation Efforts
CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS – Upon any request arising under existing investment contracts, the Secretary shall consent, where appropriate, and considering net present value to the tax-payer, to reasonable requests for loss mitigation measures including term extensions, rate reductions, principal write downs, increases in proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications.
Also, be sure to read these related posts:
Are the Rating Agencies at The Cause of Our Financial Mess?
Housing Bailout – The Real Cause?
The Paulson Plan – Still Wrong
Government Bail-Out – Risk & Reward
Housing Bail-Out … Pass or Depression
San Diego Home Sales Up … San Diego Home Median Price Drops
CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported home sales increased 56.7 percent in August in California compared with the same period a year ago, while the median price of an existing home fell 40.5 percent.
For San Diego real estate, C.A.R. reported that the August median home price was $375,090, off 2% from July.For the year-to-date one year period the San Diego median home price was down 37%. The good news was that San Diego existing home sales for the year-to-date period was up 60.5%.
The San Diego August 2007 median home price was $595,070. This was $219,980 less than today's median home price.
“There has been no meaningful change in the level of activity since late last fall,” said Ian Shepherdson of High Frequency Economics. “The NAR estimates that 35 to 40% of all sales are of distressed property, so underlying private activity is weaker than the headlines, and there is little sign of imminent improvement.”
I believe this huge jump in San Diego existing home sales shows that WITHOUT GOVERNMENT INTERVENTION, when home prices in an open market look attractive, sales will increase! San Diego home sales