This article covers the San Diego Real Estate Market Update for the month of March 2014. Market Report for the San Diego county real estate region.
March 2014 – Market Report and San Diego Real Estate Market Update.
As we start the month of March, the real estate market in San Diego County to be held back by low inventory. The San Diego Market has continued to stabilize with an increase in DOM and also increase in the months of inventory. The overall inventory level still suggest a Seller’s market, but the rapid increases in price we experienced in the first half of 2013 have slowed. The mortgage rates have been fairly stable after the first two months of 2014, and we will likely see a slow increase to the rates as we head into the spring and summer selling season.
We expect the San Diego to be constrained by low inventory levels but it appears we are trending to a more stable market. As reported in our February 2014 San Diego Market Report (for January 2014 Results) , the inventory was at a low of 3.38 months. As February 2014 closes, the available homes for sale listed as “Active” has decreased to 3.25 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 Update for March 2014*:
The average sales price was $ $508,792 and DOM of 48 days was a decrease to the data posted in January 2014 on the Average Sales Price and a no change on the DOM. The January data for the corresponding metrics at $ 539,138 and DOM of 42 days.
The number of new properties for sale listed in February 2014 was 3651 units. The number of new listings in January 2014 was 4116. The lower number of new listings and an increase in closed transactions in the month of February, as compared to January (1900 vs. 1793) could potentially lead to an inventory slow down if this trend continues into the spring. 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 6186 units, with the sales rate of 1900 units sold in November the available inventory will only support 3.24 months. We will likely see a continued uptrend in this metric as we head into the holidays and interest rates continue to move higher.
Visit San Diego Homes and Real Estate for Sale for an updated list of homes available in San Diego.
The following chart is a summary the properties listed in February 2014 in San Diego County*.
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 deteoriation of the overall economy which could lead to higher interest rates and lower demand for housing.
The way we determine the supply of inventory is by dividing the number of homes on the market in a given month by the number of houses sold that same month. The number of active properties for sale that are distressed sales is 6.0%. It will be interesting to see if this number changes as Mortgage Debt Relief Act expired at the end of 2013 and its status for extension are unknown at this time.
The following chart is a summary the distressed properties activity in February 2014 in San Diego County*:
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 3.25 months supply with new listings showing a mixed trend for the current Monthly Sales Rate.
• 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.
* Market data compiled from Sandicor – Data as of 3.1.14
Thanks for visiting; let me know if I can help!
Kouren Jouldjian, CDPE
REALTOR® / Broker Associate
CalBRE License 01487596
San Diego Homes For Sale and Real Estate Information