San Diego County Residential Real Estate Market Analysis
San Diego County Residential Real Estate Market Analysis: 4th Quarter 2010 ©2011 By Mark A. Melikian California Certified Residential Appraiser appraisals@san.rr.com P.O. Box 3051 Del Mar, California 92014 858-793-9339 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 as reported by the San Diego County MLS system. 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 peaks in 2003 at 42,746 units and decreases through 2008 to 23,972 units (see figure 1). There were 31,922 sales in 2010.
San Diego County real estate sales Figure 1
Market Overview: The monthly absorption rate (number of units sold in a given 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 (see figure 2). The 2008 monthly absorption rate decreased to a low of 1,998 units. In 2010 monthly absorption rate was 2,660 units.
Market Overview: The mean sold price for a housing unit in San Diego County peaked in 2007 at $621,675 (see figure 3). The mean sold price in 2010 was $433,026, an 8.5 percent increase over the 2009 mean sold price of $399,200 and a 30.5 percent decrease from the market peak in 2007.
Market Overview: The mean number of days a property was on the market before it sold reached a low of 29 in San Diego County in 2004 (see figure 4). In 2010 that number peaked at 69 days on market.
Detached Housing Market Specifics – 4th Quarter 2009 compared with 4th Quarter 2010: Detached home sales data for the 4th quarter of 2010 shows the highest numbers of sales were in the $300,000-$400,000 price range (see figure 5). This is consistent with the 4th quarter of 2009 when the highest numbers of sales were in the same $300,000-$400,000 price range.
Attached Housing Market Specifics – 4th Quarter 2009 compared with 4th Quarter 2010: Attached homes sales data for the 4th quarter of 2010 shows the highest numbers of sales were in the under $200,000 price range (see figure 6). This is consistent with the 4th quarter of 2009 when the highest numbers of sales were in the same under $200,000 price range.
Detached and Attached Housing Market Specifics – 4th Quarter 2010 Housing Supply: Normal residential real estate markets typically have a six to seven month supply of housing inventory. Based on 4th quarter 2010 absorption rates, current supply levels for detached properties are at, or below, normal market levels up to the $900,000 plus price ranges (see figure 7). Current supply levels for attached properties are at, or below, normal market levels up to the $600,000 plus price ranges.
Comments and Outlook: The 2010 San Diego county housing market, as a whole, saw a price increase of 8.5 percent (figure 3). Housing units in the $400,000 and below level (entry-level housing) continued to realize most of the price increases with multiple offers being reported on some properties.
During the 4th quarter, most detached housing sales activity has remained in the $300,000 – $400,000 price range (figure 5). Most attached housing sales activity has remained in the under $200,000 price range (figure 6). All housing units took slightly longer to sell in 2010 (figure 4) and absorption rates in 2010 decreased slightly from 2009 (figure 2).
Market research indicates much of the increased volume seen in 2010, especially early in the year, was attributed to first time buyers and investor activity.
First time buyers have been in the market, in large part, with the aid of government sponsored buyer incentive programs. According to many local real estate professionals this market segment has shown a decrease in activity since the recent expiration of government sponsored tax incentives for home buyers. These incentive programs appear to have encouraged buyers to enter the market sooner than some may have in the absence of these programs.
Recent investor activity has been sparked by the potential for positive returns in the housing market. This potential was based on prices that were reduced far enough to provide either a positive cash flow, or the potential for a quick profit on rehab properties. Investor activity has begun to stabilize in recent months. This may be attributed, in part, to the noted stabilization in first time buyer activity.
2010 saw an increase in the mean sales price. Individual markets in the county behave differently and there are exceptions to the following statement however; a general observation based on this data is that home prices today in San Diego County appear to be near the same level as those of 2002 mid-year.
While most entry level housing units are selling quickly, supply and demand will still need to align across all price ranges for the residential real estate market to stabilize. On December 31, 2010, there were 10,877 detached and attached property active listings in the San Diego County MLS system, compared with only 7,492 on December 31, 2009. Data shows 52 percent of the current listings were priced below $400,000. With the highest concentration of housing units selling below $400,000, it appears real estate professionals have been setting realistic price expectations for sellers. Given the increase in supply over the same period last year, real estate professionals must continue to set these realistic price expectations, and employ price reductions when necessary, as a way to stimulate demand for properties as we enter the 2011 real estate market. ©2011 By Mark A. Melikian California Certified Residential Appraiser appraisals@san.rr.com
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