San Diego County Residential Real Estate Market Analysis:

1^st Quarter 2013©2013 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. * All 2013 data in figures 1 through 4 will be projected based on market data taken from January through March as reported by the San Diego County MLS system. All projections discussed in this analysis will be updated throughout the year in subsequent quarterly reports.

San Diego 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 2013 projection shows the total number of units sold for the year will be 31,572, below the 35,935 units sold in 2012 (see 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. In

2008, the monthly absorption rate decreased to a low of 1,998 units. *The projection for 2013 shows a monthly absorption rate of 2,631 units, below the 2,995 in 2012 (see 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 2013, the projected mean sold price is $460,209, which would represent a 25.9 percent decrease from the market peak in 2007 (see 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 2013 shows the mean number of days on market to be at 58, lower than the 72 in 2012 (see figure 4).

 Detached Housing Market Specifics – 1^st Quarter 2012 compared with 1^st Quarter 2013: Detached home sales data for the 1^st quarter of 2013 shows the highest number of sales were in the $300,000-$400,000 price range (1677 units). This is concentration of sales is consistent with the 1^st quarter of 2012 when 1444 units sold in the same price range (see figure 5).

 Attached Housing Market Specifics – 1^st Quarter 2012 compared with 1^st Quarter 2013: Attached home sales data for the 1^st quarter of 2013 shows the highest number of sales were in the Under $200,000 price range (902 units). This is consistent with the 1^st quarter of 2012, when the highest number of sales were in the same price range (see figure 6).

 Detached and Attached Housing Market Specifics – 1st Quarter 2013 Housing Supply: Normal residential real estate markets typically have a six to seven month supply of housing inventory. Based on 1^st quarter 2013 absorption rates, current supply levels for detached properties are at (or below) normal market levels up to the $1,500,000 plus price ranges. Similarly, current supply levels for attached properties are at (or below) normal market levels up to the $1,500,000 plus price ranges (see figure 7).

San Diego County Real Estate Market Comments and Outlook: Based on the first quarter of the year, projections for the 2013 San Diego County housing market show sale volume, absorption rates and days on market to decrease while sale prices increase. Given the current limited supplies of housing across most price ranges this projection would seem intuitive.

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 2012.

A relatively low supply of housing has helped the mean sale price increase over the past year. For an historical perspective the current mean sales price is approximately at the same level as in 2003 (see figure 3).

Housing supplies have reached below normal levels across a wider range of price points (see figure 7). This, coupled with the recent news that the unemployment rate has lowered may provide added consumer confidence in the local real estate market. The number of current listings and absorption rates suggests the potential for a continued 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.

As noted, 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. Most sales in 2013 are projected 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, although the detached market has seen an increase in sales in between $400,000 and $500,000 (see figure 5). This potential upward trend will be analyzed in subsequent reports.

San Diego County Residential Real Estate

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