Tag Archives: San Diego

San Diego Home Sales Collapse To Lowest Level In 11 Years

A combination of rapid mortgage rate increases and decreased affordability, San Diego County home sales collapsed 17.5% to the lowest level in 11 years last month, in the first meaningful sign that one of the country’s hottest real estate markets could be at a turning point, real estate tracker CoreLogic reported Tuesday.

In September, 2,942 homes were sold in the county, down from 3,568 sales last year. This was the lowest number of sales for the month since the start of the financial crisis when 2,152 sold in September 2007.

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CoreLogic said median home prices dropped in the region to $575,000, the first decline since January, after hitting a record high of $583,000 in August.

Some experts blamed the slowdown on rising mortgage rates, which have drastically increased the per month debt servicing payments for potential new homebuyers.

“The double whammy of higher prices and rising mortgage rates has priced out some would-be buyers and prompted others to take a wait-and-see stance,” said Andrew LePage, a CoreLogic analyst, in the release. “There was one caveat to last month’s sharp annual sales decline — this September had one less business day for recording transactions. Adjusting for that, the year-over-year decline would be about 13 percent, still the largest in four years.”

On a monthly basis, sales declined 22% in September compared with August. Cyclically, sales tend to drop 10% from August to September, but this time, it seems that industry is experiencing late cycle stress.

The report also said sales of newly built homes are suffering more than sales of existing homes because home builder production remains below the historical mean. New home constructions come at a premium. Sales of newly built homes were 47% below the September average dating back to 1988, while sales of existing homes were 22% below their long-term average.

The S&P CoreLogic Case-Shiller San Diego Home Price NSA Index (data via Reuters Eikon) shows a potential double top with 2005 high. Lifetime high occurred in July 2018 of 259.69, with the index now fading into the Fall period.

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Additional S&P CoreLogic Case-Shiller San Diego Home Price data

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“Price growth is moderating amid slower sales and more listings in many markets,” LePage said. “This is welcome news for potential home buyers, but many still face a daunting hurdle – the monthly mortgage payment, which has been pushed up sharply by rising mortgage rates.”

Last month, Bank of America Called It: “The Peak In Home Sales Has Been Reached; Housing No Longer A Tailwind.” It seems that the San Diego real estate market woes are more evidence that storm clouds are gathering over the broader U.S real estate market.

Source: ZeroHedge

San Diego Home Prices Hit All Time High

San Diego County’s median home price hit its highest price in history in July, $579,750, while sales hit a four-year low, real estate tracker CoreLogic reported Thursday.

The previous record was $575,000 in May. Home prices have been breaking records on nearly a month-to-month basis all year. As of July, home prices had increased 8 percent in a year — the most of any Southern California county.

Home sales hit its lowest point in years in July with 3,607 sales. The last time sales were that low was July 2014, when the county was still coming out of the housing bust, when there were 3,530 sales.

Affordability constraints for many potential buyers could be the reason why sales are so low despite more homes on the market, said CoreLogic analyst Andrew LePage in the monthly report.

“The overall trend in recent months has been toward more listings,” he wrote, “suggesting that sales also remain weak relative to current housing demand because more and more would-be buyers are unable or unwilling to buy.”

Home inventory has increased slightly in recent months, but it is still below levels reached in years past, said data from the Greater San Diego Association of Realtors. There were 7,613 homes listed for sale in July, up from July 2016 when 5,828 homes were for sale, and 6,571 homes for sale in July 2015.

In 2010, during the Great Recession, there were as many as 13,000 homes on sale in a given month.

In July, resale single-family homes tied the peak median of $630,000 reached in June with 2,314 sales. Resale condos hit their highest ever median of $432,000 with 1,080 sales. The median for newly built homes was $703,750, but was limited to 213 sales.

San Diego County’s 8 percent increase in a year outpaces the rest of the region, but it is still a cheaper option for coastal California.

Orange County home prices were up 6.6 percent in a year with a median of $735,750, Ventura County prices were up 6.3 percent for a median of $595,000 and Los Angeles County increased 5.7 percent for a median of $607,500.

Interior counties’ median home price increases still did not keep up with San Diego. In San Bernardino County, home prices were up 6.6 percent for a median of $325,000 and up 5.8 percent in Riverside County for a median of $386,000.

Dana Kuhn, real estate lecturer at San Diego State University, said affordability constraints and the number of people leaving the region for cheaper areas may slow the price increases. He said declining sales will not be the best indicator that sales are starting to slow down.

“The better indicator of that will be rising inventory of homes for sale and longer market times for those offered,” Kuhn said.

While inventory of homes is increasing, days on market still tends to be very quick. Based on a 12-month rolling average, the average days it took for a San Diego County home to sell in July was 28, down from 31 at the same time last year.

Condos from $250,001 to $500,000 sold the fastest, staying on the market 21 days.

Investors are still finding value in the San Diego market. Absentee buyers, typically investors who don’t intend on living in the home as a primary residence, made up 20.1 percent of sales in July, up from 19.4 percent of sales at the same time last year. In early 2013, more than 30 percent of sales went to absentee buyers.

For areas with at least 10 sales, Solana Beach (92075) had the biggest price increase for single-family resale homes in a year at 41 percent for a median of $1.8 million. It was followed by Coronado (92118) with an increase of 32 percent and a median of $2.4 million and Cardiff (92007) with an increase of 31 percent with a median of $1.1 million.

For resale condos, Oceanside (92054) had the biggest yearly increase at 50 percent with a median of $566,000. It was followed by Clairemont (92117) with a 37 percent increase and a median of $475,000 and Encinitas (92024) with a 32 percent increase and a median of $641,000.

When adjusting for inflation, San Diego County’s home price has still not reached its pre-housing crash price. In November 2005, the median hit $517,500, which would be nearly $660,000 today.

Source: by Phillip Molnar | San Diego Union Tribune