San Diego County Residential Real Estate Market Analysis – Part 2
This is the 2nd. of a three part article By Mark A. Melikian California Certified Residential Appraiser appraisals@san.rr.com
Market Specifics – 2nd Quarter 2008 compared to 2nd Quarter 2009: Detached home sales data for the second quarter of 2008 shows the highest number of sales in the $300,000-$400,000 price range (see figure 5). During the second quarter of 2009 we see both an increase in the number sold and a shift in market activity with the highest number of sales now in the $200,000-$300,000 price range. Further analysis shows fewer current listings than sales through the $500,000-$600,000 price range. The 2nd quarter data is consistent with the Market Overview data which shows an increase in the number of sold listings and a continued reduction in the mean sales price in San Diego County.
figure5
Attached homes sales data for the second quarter of 2008 shows the highest number of sales in the $200,000-$300,000 price range (see figure 6). During the second quarter of 2009 we see both an increase in the number sold and a shift in market activity with the highest number of sales now in the under $200,000 price range. Further analysis shows fewer current listings than sales through the $300,000-$400,000 price range. The 2nd quarter data is consistent with the Market Overview data which shows an increase in the number of sold listings and a continued reduction in the mean sales price in San Diego County.
figure6
Normal residential real estate markets typically have a six to seven month supply of housing inventory. Current supply levels, based on 2nd quarter absorption rates only, 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 $700,000 plus price ranges. Whether this is a signal that some degree of recovery is imminent in these price ranges will continue to be analyzed in subsequent reports.
figure 7
*See the next part of this post tomorrow.
San Diego real estate market
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The extraordinarily high prices for San Diego real estate really make the investment potential very risky when the average rent doesn’t come anywhere near the carrying charges an owner has to pay.
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Houses will only fall 30% if everyone rushes for the exits. 5 years ago many markets were underpriced and it’s highly unlikely they’ll go back to that level. There’s still a lot of demand for housing and THERE ALWAYS WILL BE! Anyone predicting a 40% decline is making a prediction because he earns money by making predictions!
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Just get it over and done with, a recession is required to weed out the crap in the market.
The UK & the US both need a hard landing. Bring it on!!
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A house is worth no more than what someone is willing to pay you for it. No buyer? Value = $0. House prices have held steady throughout the past 100 years in the US at 3x median income of whatever area you study… because every house you build must be affordable to the workers within the surrounding area.
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