San Diego Real Estate Market Analysis

San Diego County Residential Real Estate Market Analysis:  1^st Quarter 2012 ©2012

By Mark A. Melikian California Certified Residential Appraiser appraisals@san.rr.com P.O. Box 3051 Del Mar, California 92014 858-793-9339

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. *The 2012 projection shows the total number of units sold for the year will be 28,544, below the 31,885 units sold in 2011 (see figure 1).

Figure 1

 San Diego Real Estate Market Analysis

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. In 2008, the monthly absorption rate decreased to a low of 1,998 units. *The projection for 2012 shows a monthly absorption rate of 2,379 units, the lowest number since 2008 (see figure 2).

Figure 2

Market Overview: The mean sold price for a housing unit in San Diego County peaked in 2007 at $621,675. The mean sold price in 2009 decreased to a low of $385,754, a 37.9 percent decrease from the market peak in 2007. *In 2012, the projected mean sold price is $398,342, which would represent a 35.9 percent decrease from the market peak in 2007 (see figure 3).

Figure 3

Market Overview: The mean number of days a property was on the market in San Diego County reached a low of 29 in 2004. *The projection for 2012 shows the mean number of days on market to be at 80, a new high for the given time frame (see figure 4).

Figure 4

Detached Housing Market Specifics – 1^st Quarter 2011 compared with 1^st Quarter 2012: Detached home sales data for the 1^st quarter of 2012 shows the highest number of sales were virtually similar both in the $200,000-$300,000 price range (1443 units) and the $300,000-$400,000 price range (1444 units) price range. This is concentration of sales is  consistent with the 1^st quarter of 2011 when 1153 units sold in the $200,000-$300,000 price range and 1151 units sold in the $300,000-$400,000 price range (see figure 5).

San Diego Real Estate Market Analysis

Figure 5

Attached Housing Market Specifics – 1^st Quarter 2011 compared with 1^st Quarter 2012: Attached home sales data for the 1^st quarter of 2012 shows the highest number of sales were in the Under $200,000 price range. This is consistent with the 1^st quarter of 2011, when the highest number of sales were in the same Under $200,000 price range (see figure 6).

Figure 6

Detached and Attached Housing Market Specifics – 1st Quarter 2012 Housing Supply: Normal residential real estate markets typically have a six to seven month supply of housing inventory. Based on 1^st quarter 2012 absorption rates, current supply levels for detached properties are at (or below) normal market levels up to the $1,000,000 plus price ranges. Similarly, current supply levels for attached properties are at (or below) normal market levels up to the $1,000,000 plus price ranges (see figure 7).

Figure 7

Comments and Outlook: Based on the first quarter of the year, projections for the 2012 San Diego County housing market show sales volume to decrease, days on market to increase and prices to decrease slightly from those in 2011. The highest volume of sales activity for attached units is projected in the Under $200,000 price range. The highest volume of sales activity for detached units is projected in the $400,000 and below price range. This outlook is nearly identical to both the first quarter, and entire year, of 2011.

Historical data demonstrates that the mean sales price of housing has found a balance near the $400,000 price range. For an historical perspective the current mean sales price is approximately at the same level as in 2002 (see figure 3).

Housing supplies have reached below normal levels across a wider range of price points (see figure 7). The number of current listings and absorption rates suggests the potential for a more competitive environment, in the near future, for buyers in most housing price ranges. The impact of current supply levels will be analyzed in subsequent reports.

The highest number of detached housing sales continues to be below $400,000. The highest number of attached housing sales continues to be below $200,000. While the overall number of overall housing sales is projected to decrease slightly in 2012, most sales appear to remain in the lower price points (entry level housing).

With the highest concentration of housing selling below $400,000, real estate professionals should focus on these price points, and must continue to set realistic price expectations for sellers as we enter the 2012 housing market.

San Diego Real Estate Market Analysis