San Diego home values over a one year period

San Diego California resale single family home appreciation

In the table below, www.brokerforyou.com only looked at selected San Diego areas that

had 15 or more closed resales in 2007.

It seems that the single family home resale market is holding up much better than San Diego condominiums –see our prior post on condominium values at:

http://www.brokerforyou.com/brokerforyou/?p=268 

and the higher end San Diego homes are doing the best.

October 2007 – *Percent Change is for the median price from the same month last year.

 © www.brokerforyou.com

Data source: www.dqnews.com as of November 15th, 2007

[tags]San Diego, San Diego California, San Diego California real estate, San Diego home values, real estate bubble[/tags] San Diego Realtors 

San Diego Condominium Crash

Most will agree the summer of 2005 was the top of the San Diego real estate market.  With the news sources reporting 2007 monthly sales statistics or comparisons with 2006 sales and prices, the general public may be under the misconception that their San Diego property has only declined at most, a few percent.

The sad reality is the drop from 2005 sale prices is well into double digits! (Actually, CRASH would more accurately describe this double digit decline.)   To compile accurate figures, the brokerforyou staff only looked at condo/town home sales of the same model units within each condo community.  We tried to compare three same model closed sales that occurred in 2005 with the latest closed sales so far for 2007.

Brokerforyou looked at seven areas in San Diego (Chula Vista, Downtown, Fashion Valley, La Mesa, Mission Valley, Pacific Beach, and San Carlos) to provide a more accurate sales trend.  Keep in mind that we are still in the process of checking on seller concessions for the 2007 sales prices.  As seller concessions are very common today and can range up to 3% of the sales price, one must consider the facts noted below to actually be reflecting a milder decline vs. the real net to the sellers.
 

For the seven San Diego neighborhoods noted above, the average value drop was 19% from 2005 closed sale prices. The largest average declines were Mission Valley at 26.9% followed closely by Downtown (Little Italy) at 24.2%.[tags]San Diego real estate bubble, San Diego housing bubble, San Diego real estate sales, San Diego home values, San Diego housing, San Diego California real estate[/tags]   San Diego California real estate agents

Is Your San Diego Home Appraisal Really Accurate?

Working mostly as a listing broker, I always receive calls from appraisers who want to confirm the reported MLS sales price, ask about the condition of the property and if the seller gave any buyer concessions.  By concessions, I’m referring to payment of buyers closing/loan costs or adding some improvement to the property prior to the close of escrow. Obviously, the appraisers were doing their due diligence to insure that their appraisals reflect the true resale value.

About two years ago, the frequency of these appraisal calls decreased and for the last 18 months or so, I personally have received perhaps just one such call for my last six sales. I’ve confirmed the phenomena of these vanishing appraisal calls with other local brokers. I also called a few appraisers, but just one would talk about this and only after assurance of anonymity. This appraiser originally said with the new State licensing law there were many more new appraisers and questioned their competency. When pressed, he very reluctantly conceded that my assumption that the real pressure to bring in the appraisals at the contracted purchase price (all resale appraisers have a copy of the purchase contract prior to inspecting the property) was causing them not to question the listing broker on condition or especially, seller concessions.

It’s my opinion, in our current San Diego real estate market, that it is very rare for a buyer not to get concessions from the seller. I’m not talking small change here; these real life recent sales show:

La Mesa $362,000 sale         -   $4,500 credit to buyers

San Carlos $480,000 sale      - $14,400 credit to buyers

Mission Valley $360,000 sale – $10,000 credit to buyer

San Carlos $385,000 sale      - $10,000 credit to buyers

So, are the buyers who are now paying approx. $375 for a residential appraisal really getting an accurate reflection of their potential new properties value? If an appraiser looks at the $480,000 sale above, as a comparable without inquiring about the concessions ($14,400 in this real example) the appraisal will be too high. If the appraiser does inquire about the concessions, they have to consider the comparable property was worth not $480,000 but $465,600!

Without payment of the concession, it is unlikely this property would have sold. If the true facts did cause the new appraisal to come in below the contracted purchase price, the buyer (paying for an accurate appraisal) would be not be obligated to go forward with the sale.  In today’s strong San Diego’s buyer’s market, the buyer would be in a very strong position to have the seller reduce the sales price to the accurate appraised value and thereby potentially save thousands!

I’m not a licensed California appraiser, just a California licensed real estate broker with three decades of residential experience, Many may not agree with the fact that these concessions reduce the real resale value of properties.  I can understand their opinion.  But, I think they are dead wrong! No seller I know, is willing to give away thousands of dollars of their equity if they could avoid it. This is a classic example on the part of pressured appraisers, of hear no evil, see no evil!

The easy correction to this problem would be a State requirement that appraisers of residential properties use due diligence to verify the full details of all comparable sales used in an appraisal. Until this happens, I would advise buyers to tell their mortgage lenders that they want a copy of the appraisal and will be looking for some notation on the document showing that the appraiser made inquiry into both the condition and possible concessions on each comparable used.[tags]San Diego home appraisals,San Diego real estate market, home appraisals, San Diego housing, San Diego home sales[/tags]  San Diego home sales