OPPORTUNITY IN THE SAN DIEGO MARKET

The San Diego Union Tribune published an article today announcing the the decline in real estate prices was slowing. It also indicated that the area ranked as the 8th worst in the U.S. Being down 42.3% from the high in 2005 and back to the level they were in July of 2002 and 45% above what they were in 2000.

The article then went on to site the newly released S&P case/Schiller Index statistics. However, that is a 20 city index that paints a real estate picture with a very broad brush.















Does this look like a turnaround trend line to you??




As you can see in my previous post of May 19, there are trends in the hardest hit areas that are the main cause of the slowing declines. The San Diego market is showing many signs of buying opportunities on the lower-end property pricing. Multiple bids and overbids are occurring in that range while the middle and upper level prices the markets show much less activity.

KQED FM Radio California Report broadcast yesterday that there are military assets, personnel and support services being transferred to the San Diego over the next two years. The estimate is that 10,000 military and support personnel will be relocating to the area during that period. This will also add to the recovery of real estate in the area.

Although completely contrary to the S&P analysis and conclusions, this is a more accurate of the market in the San Diego area. A “perfect storm” of low prices, high inventory, first time home buyer (anyone who has not owned a home in the last 3 years), low interest rates and other incentives is creating a fertile environment for anyone who is ready to buy without being dependent upon selling an existing property.

What's the News on San Diego Real Estate?

Today's Headlines:

Bloomberg - Southern California Home Prices Fall on Foreclosures

San Diego Union Tribune - Sign of Optimism: Home Prices Rise

Forbes – The Real Estate Bubble Won't Re-inflate

Ventura County Star – County Median Home Price Increases from March



What's the "REAL" story?

All of the above!

According to Real Estate industry data provider Altos Research here is the raw data:

The median single family home price in San Diego for May 17 is $526,903.
This is up from a low of about $440,000 in early November 2008 and has sharply increased since the end of February.

Average Days on Market (DOM) for listed homes has continued to escalate from a low of 80 in October 2008 to the current 117 DOM. This trend has not seen a deviation.

Available houses on the market has declined from a high of 3,500 in July, 2008 to 2,288 as of May 17, 2009.

So to sum up: sale prices are increasing, it is taking longer to sell homes and there are fewer homes to sell.

San Diego homes for sale

If you look at the foreclosures currently available in San Diego, which are currently numbered at 9,788 versus the 3,953 homes currently on the market for the area, you have another perspective.

Foreclosures and short sales have been leading the market for investors and first time home buyers taking advantage of the best pricing and financing available in over twenty years. This in turn, is stabilizing the low end of the market and stopping pricing declines. In some communities there are being multiple offers submitted and the asking prices for these categories are being overbid.

We are seeing the market at work in its most fundamental form.

Micro-markets are also a major factor as some communities adjacent to each other have drastically disparate statistics right now.

As long as you don;t have a home to sell, opportunities abound right now, especially with the incentives for first time home buyers (defined as a person who has not owned real estate in the last three years).

C.A.R. Housing Affordability Fund Mortgage Protection Plan

New Program to protect new home owners if they lose their job

The California Association of Realtors announced yesterday the C.A.R. Housing Affordability Fund Mortgage Protection Plan (C.A.R.H.A.F.MPP) for first time buyers. The goal is alleviate some of the fear of buying a home and suddenly losing your job.

First time home buyers who lose their jobs due to layoffs could be eligible to receive $1,500 per month for six months to help make their mortgage payments.

From the C.A.R. website

new program designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and subsequently being unable to meet their monthly mortgage obligations.s

.A qualified co-buyer can also participate in the program and receive a monthly benefit of $750.00 per month for up to six months.

(CAR) has dedicated$1,000,000 towards in MPP, and estimates that up to 3,000 families will benefit from the program this year.

To qualify for the program Applicant must

· Be a first-time home buyer – someone who has not owned
a home in the last three years.
· Open escrow April 2, 2009, or later, and close on or before
Dec. 31, 2009
· Use a California REALTOR® in the transaction
· Purchase the property in California
· Be a W-2 employee (cannot be self-employed)

To apply for the program, home buyers must request an application for the H.A.F. Mortgage Protection Program from their REALTOR®.

Sounds like a great program, I just wander why only first time buyers qualify.

The Real Effects of the Housing Industry Downturn

The three major sectors related to housing are in the midst of a slump not seen since the early 90’s. Construction, Real Estate Finance, and Retail have all seen their rate of growth decline to pre-Clinton eras. Unemployment levels have shot up to 8.6%, a 2% contraction year-over-year.

The graph above was taken from the blog, piggington.com. Check out their site for more in depth analysis on the San Diego Real Estate Market

Some cities have been hit harder than others, below is a list of cities in San Diego that have been hit hardest according to sandiegoatwork.com’s December forecast:


National City- 14.4%
Imperial City- 11.9%
El Cajon- 10.1%
Bostonia-CDP 9.4%
Chula Vista 8.6%
Vista 8.2%

San Diego Foreclosure Report January 2009

According to research firm Realty Trac, San Diego County experienced 6,138 January foreclosures. A year over year increase of 13%. However, January foreclosures were down 8% against December, a decrease that’s largely attributed to new state regulation that recently became effective. A similar trend was seen last fall, when new regulations caused foreclosure filings drop off in October, only to come surging back in December.

"Smoke Free Apartment Buildings?"

First, smoking was banned in planes, restaurants were soon to
follow, and if activists have there way apartment buildings will be
next.
Health advocates point out that less than 14 percent of Californians
smoke cigarettes, making the state a prime target for policy change.
Activists in San Diego and National City are pushing elected officials
to enact laws against smoking in apartments and condos. Others are
promoting voluntary policies to landlords and management companies