San Diego Real Estate Market Analysis

San Diego County Residential Real Estate Market Analysis: 4^th Quarter 2011 – This is part 2 of 2

By Mark A. Melikian California Certified Residential Appraiser appraisals@san.rr.com P.O. Box 3051 Del Mar, California 92014 858-793-9339

The following is a market data summary of detached and attached properties as reported by the San Diego County MLS system. The data includes all zip codes in San Diego County as reported by the San Diego County MLS system.

*Please see prior post for the first part of this article.

Detached Housing Market Specifics – 4^th Quarter 2010 compared with 4^th Quarter 2011: Detached home sales data for the 4^th quarter of 2011 shows the highest numbers of sales were in the $200,000-$300,000 price range. This reflects a shift from the 4^th quarter of 2010, when the highest number of sales were in the $300,000-$400,000 price range (see figure 5).

Attached Housing Market Specifics – 4^th Quarter 2010 compared with 4^th Quarter 2011: Attached homes sales data for the 4th quarter of 2011 shows the highest number of sales were in the under $200,000 price range. This is consistent with the 4^th quarter of 2010, when the highest number of sales were in the same under $200,000 price range (see figure 6).

Detached and Attached Housing Market Specifics – 4^th Quarter 2011 Housing Supply: Normal residential real estate markets typically have a six to seven month supply of housing inventory. Based on 4^th quarter 2011 absorption rates, current supply levels for detached properties are at, or below, normal market levels up to the $900,000 plus price ranges. Current supply levels for attached properties are at, or below, normal market levels up to the $600,000 plus price ranges (see figure 7).

Comments and Outlook: The 2011 San Diego county housing market was very similar, in most respects, to the 2010 market. Housing prices, number of units sold, and absorption rates all remained relatively stable over the past two years. The number of days on market, however, increased to 79 days. This is a high for the time period from the year 2000 through today (see figure 4).

The mean sales price of housing has remained at levels just above $400,000 over the past two years. For an historical perspective the current mean sales price is approximately at the same level as mid-year 2002 (see figure 3).

During the second half of 2011 there were two potentially significant shifts that occurred in the San Diego real estate market.

First, the housing supplies have reached below normal levels across a wider range of price points (see page 7). The number of current listings and absorption rates suggests a more competitive environment, in the near future, for buyers in most housing price ranges. The impact of current supply levels will be analyzed in subsequent reports.

Second, the highest number of detached housing sales shifted down from the $300,000 to $400,000 price range into the $200,000 to $300,000 price range. While the overall number of housing sales remains relatively stable, there has been a shift to a lower price point for detached housing.

With the highest concentration of detached housing units now selling below $300,000, real estate professionals must continue to focus on setting realistic price expectations for sellers as a way to stimulate demand for properties as we enter the 2012 housing market.