This article covers the San Diego Real Estate Market Report and Update for the month of June 2014. Market Report for the San Diego county real estate region.
June 2014 – Market Report and San Diego Real Estate Market Update.
Some have noted a slight pause in the housing recovery this year. The American Dream of homeownership is alive and well, but it must still contend with market fluctuations. Buyers need homes for sale if they’re expected to buy said homes. They also need reliable financing, better jobs and stronger wage growth. The opportunities are out there. Now we need people to take advantage of them.
We expect the San Diego to be constrained by low inventory levels but it appears we are trending to a more stable market. As May 2014 closes, the available homes for sale listed as “Active” has increased to 2.9 months. Many zip codes in San Diego have increased their inventories to more robust levels and buyers are being able to find a more diverse selection of available housing.
The following chart is a summary of the overall San Diego Real Estate Market Report and Update for May 2014*:
New Listings increased 2.0 percent to 4,753. Pending Sales were down 9.1 percent to 3,241. Inventory levels shrank 3.2 percent to 8,359 units.
Prices forged onward. The Median Sales Price increased 8.4 percent to $450,000. Days on Market was down 28.6 percent to 35 days. Absorption rates slowed as months’ Supply of Inventory was up 3.6 percent to 2.9 months.
We’ve had a mixed bag of economic news lately. As expected, national GDP contracted slightly during Q1-2014, which most economists attribute to impermanent factors like the harsh winter. We’ve now had more than four straight years of monthly private sector job growth. It hasn’t been extraordinary growth, but it sure beats mass layoffs.
Buoyed by an improving sales mix, home prices continue their ascent despite erratic demand indicators. More inventory, more high-skilled job growth, and less economic and political uncertainty are still top priorities.
The average sales price was $ $550,586 and DOM of 35 days was an increase of 4.4% to the data posted in April 2013 on the Average Sales Price and a reduction of 28.6% on the DOM. The April 2013 data for the corresponding metrics at $527,353 and DOM of 49 days. For the complete report visit May 2014 Real Estate market Report
The number of new properties for sale listed in May 2014 was 4753 units. The number of new listings in May 2013 was 4659. The higher number of new listings and a lower number of closed transactions in the month of May 2014 should be a healthy sign as more properties are available for buyers. We will have to keep a close watch to this as it could be an indicator to another strong Seller’s market.
The available inventory of homes for sale was 8359 units, with the sales rate of 2880 units sold in May the available inventory will only support 2.9 months. We will need to wait until the next month to see if this trend is ongoing as we move into the busy summer sales period.
Visit San Diego Homes and Real Estate for Sale for an updated list of homes available in San Diego.
So how’s the market? We’ve all heard it, but it’s difficult to answer succinctly. The best answer may be “It depends.” It’s contingent upon area, market segment, time period, baseline period, which measures and more. For the 12-month period spanning June 2013 through May 2014, Pending Sales in San Diego County were down 6.6 percent overall. The price range with the largest gain in sales was the $1,000,001 to $1,250,000 range, where they increased 29.5 percent.
The overall Median Sales Price was up 8.4 percent to $450,000. The property type with the largest price gain was the Condos – Townhomes segment, where prices increased 22.4 percent to $308,400. The price range that tended to sell the quickest was the $500,001 to $750,000 range at 36 days; the price range that tended to sell the slowest was the $1,250,001 Or More range at 69 days.
Market-wide, inventory levels were down 3.2 percent. The property type that lost the least inventory was the Single-Family Homes segment, where it decreased 3.1 percent. That amounts to 3.0 months’ supply for Single-Family Homes and 2.6 months’ supply for Condos – Townhomes.
Distressed sales continue to trend lower nearly 10% of total units sold. This trend is a positive for the overall health of the Real Estate Market in San Diego. Sellers are being encouraged to place their properties on the market due to the increase of home values and not because due to their need to liquidate the property due to a distressed situation. We should continue see this trend continue unless we see a significant erosion of the overall economy which could lead to higher interest rates and lower demand for housing.
Following is a comparison of the overall San Diego Market and Lender Mediated listings:
New Listings in San Diego County increased 2.0 percent to 4,753
• Traditional New Listings increased 11.3 percent to 4,227
• Lender-mediated New Listings decreased 38.8 percent to 526
• Share of New Listings that were lender-mediated fell to 11.1 percent
Closed Sales were down 22.1 percent to 2,880
• Traditional Closed Sales were down 8.0 percent to 2,534
• Lender-mediated Closed Sales were down 63.4 percent to 346
• Share of Closed Sales that were lender-mediated fell to 12.0 percent
The overall Median Sales Price rose 8.4 percent to $450,000
• The traditional Median Sales Price rose 1.1 percent to $460,000
• The lender-mediated Median Sales Price rose 17.7 percent to $367,000
Visit San Diego Bank Owned Real Estate for Sale for an updated list of homes distressed properties available in San Diego.
The National Association of REALTORS (NAR) quantifies a market to be in equilibrium (not a buyer or a seller market) when the supply of homes is at six months. This number is very subjective and really dependent in the region and other factors. Anything above six months is considered as a Buyer’s Market and anything below the six month mark as a Seller’s Market. I feel that three to six months of inventory could be considered as a market in equilibrium. At these levels, while buyers are not in absolute control of the market, if sellers prepare the house well and price it right, they’ll find multiple buyers at the door; however, all things being equal, it will linger on the market and sellers are more willing to provide subsidies and drop prices.
Following are some of my anecdotal observations in the local Market:
• More stable Real Estate Market in San Diego for existing housing inventory. Only 2.9 months’ supply with new listings showing a mixed trend for the current Monthly Sales Rate. For the complete report visit May 2014 Real Estate Housing Supply Overview
• Distressed property continues to be at near 10% of total sales. This number continues to trend lower. This is a healthy sign, as a lower distressed sales number indicates equity Sellers entering the market.
• Home sales prices have stopped their upward trend and reaching a near term peak in other areas. Very important to understand this dynamic if you are ready to buy or sell in those areas.
• Rapid Price inflation has slowed down, and certain buyers are now able find suitable housing in this market.
• Multiple offers still on the lower price range still a challenge.
• Seller subsidies are starting to come back in the higher price points.
• High down payments are becoming the norm including many all-cash offers.
• Higher interest rates have slowed the overall market. Current rates are still below historical averages. Please review the latest Mortgage Rates Survey at our site.
In conclusion, the San Diego Real Estate Market continues to favor the sell side of the transaction, however it is trending to a more stable market driven by several factors in the US and Local economy. If you are in the market for a new property, it is imperative to monitor the market for properties that meet your requirements. Understand market dynamics and understand that list price may not accurately indicate final sales price as property valuations are being set by forward demand needs as opposed to recent comparable sales activity.
If you are on the market to sell your property, it may be a good time to review the supply of existing comps and market demand and accurately entertain an offer that maximizes your sales proceeds.
For additional information on this article or more information on the San Diego Real Estate Market Update, please call us at 619.333.0790.
Kouren Jouldjian, CDPE
REALTOR® / Broker Associate
CalBRE License 01487596
San Diego Homes For Sale and Real Estate Information
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