November 11, 2024

©2010    By Mark A. Melikian  California Certified Residential Appraise   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. * All 2010 data in figures 1 through 4 will be projected based on market data taken from January through March as reported by the San Diego County MLS system. All projections discussed in this analysis will be updated throughout the year in subsequent quarterly reports.

Market Overview: The data provided analyzes residential real estate sales beginning in the year 2000, which is used as the base year. The number of sold listings in San Diego County peaks in 2003 at 42,746 units and decreases through 2008 to 23,972 units. In 2009 the number of sold listings rebounded to 33,827 (see figure 1). *The 2010 projection shows the total number of units sold for the year will be 26,996.

San Diego California real estate market

Figure 1


Market Overview: The monthly absorption rate (number of units sold in a given month) will mirror the trend we see in the number of sold listings. The peak monthly absorption rate occurred in 2003 with 3,562 units selling per month (see figure 2). The 2008 monthly absorption rate decreased to a low of 1,998 units. In 2009 this number rebounded to 2,819 units. *The 2010 projection shows a monthly absorption rate of 2,250 units.

San Diego California housing market

Figure 2

Market Overview: The mean sold price for a housing unit in San Diego County peaked in 2007 at $621,675 (see figure 3). The mean sold price in 2009 was $399,200, a 35.8 percent decrease from the market peak in 2007. *The 2010 projection shows a mean sold price of $419,337, which would represent a five percent increase from the 2009 mean sold price and a 32.5 percent decrease from the market peak in 2007.

San Diego real estate market

Figure 3

Market Overview: The mean number of days a property was on the market before it sold reached a low of 29 in San Diego County in 2004 (see figure 4). In 2007 and 2008 that number reached a high of 66. *The 2010 projection shows the mean number of days on market to match the numbers from 2007 and 2008 at 66.

San Diego real estate market

Figure 4


Detached Housing Market Specifics – 1st Quarter 2010 compared to 1st Quarter 2009: Detached home sales data for the first quarter of 2010 shows the highest number of sales were in the $300,000-$400,000 price range (see figure 5). The first quarter of 2009 shows the highest number of sales were in the $200,000-$300,000 price range. Further analysis reveals fewer current listings than sales through the $300,000-$400,000 price range.

San Diego real estate outlook
San Diego real estate outlook

Figure 5


Attached Housing Market Specifics – 1st Quarter 2010 compared to 1st Quarter 2009: Attached homes sales data for the first quarter of 2010 shows the highest number of sales were in the under $200,000 price range (see figure 6). The first quarter of 2009 shows the highest number of sales were in the same under $200,000 price range. Further analysis reveals fewer current listings than sales through the $200,000-$300,000 price range.

San Diego housing market
San Diego housing market

Figure 6


Detached and Attached Housing Market Specifics – 1st Quarter 2010 Housing Supply: Normal residential real estate markets typically have a six to seven month supply of housing inventory. Based on 1st quarter 2010 absorption rates, current supply levels for detached properties are at, or below, normal market levels up to the $900,000 plus price ranges (see figure 7). Current supply levels for attached properties are at, or below, normal market levels up to the $500,000 plus price ranges.

San Diego home market
San Diego home market

Figure 7


Comments and Outlook: The 2009 San Diego county housing market, as a whole, was one of general price stabilization. Sales volume increased modestly, units in the $400,000 and below level (entry-level housing) realized price increases and multiple offers were being reported on some properties. Projections for 2010, based on the first quarter market data, show that housing prices will experience a modest increase of approximately five percent. Most price gains will likely continue in the entry-level price ranges. Housing units are projected to take slightly longer to sell in 2010 and absorption rates in 2010 are projected to decrease slightly from 2009.

Market research indicates much of the increased volume seen in 2009 was attributed to investor and first time buyer activity.

Investor activity is sparked by the potential for positive returns in the housing market. This potential is based on prices that have been reduced far enough to provide either a positive cash flow or the potential for a quick profit on rehab properties. Investor activity should continue as long as this price point remains attractive. Another factor contributing to continued investor activity is the lack of alternative investment opportunities. When other investment opportunities begin to outperform the local housing market, investor activity will shift away from the housing market.

First time buyers have been in the market, in large part, with the aid of government sponsored buyer incentive programs. Whether or not first time buyers will continue to be active as these government programs expire will remain to be seen.

Historical data demonstrates that the mean sales price at the end of 2009 is approximately at the same level as 2002 year end. 2010 has started with a modest increase in the mean sales price. Individual markets in the county behave differently and there are exceptions to the following statement however; a general observation based on this data is that home prices today in San Diego County appear to be near the same level as those of 2003 mid-year.

While the entry level housing units are selling quickly, supply and demand will still need to align across the higher price ranges (move-up housing). On March 31, 2010, there were 9,210 detached and attached property active listings in the San Diego County MLS system; 61.2 percent of these listings were priced above $400,000. Real estate professionals must focus on setting realistic price expectations for sellers and employ price reductions, when necessary, as a way to stimulate demand for properties in the move-up housing price ranges.

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