San Diego real estate sales, as well as most real estate sales in most of California, are up for the most recent months. It seems this fact is getting so much attention that the accompanying fact that home values in California are still falling, is getting little mention.
Plus, the latest figures for real estate sales in California were in before our economic situation showed deepening signs of a severe recession.
The median price of $328,000 in San Diego County was the lowest since June 2002, as reported in San Diego Union-Tribune.
"There's this unfailing correlation between big price declines and big sales increases," an analyst with MDA DataQuick, told Bloomberg News.
Here in San Diego, upon checking with two major local escrow companies, it seems the bulk of the real estate sales in San Diego are bank owned or short sales. The escrow numbers showed that these distressed sales accounted for 62% to 70% of the new escrow business during August and September.
I personally feel this up-tick is a good sign, but by no means, a sign of an impending turnaround for the battered San Diego housing market.
It is much more important that the median San Diego home price is down 38% in the same period and the majority of San Diego home sales are foreclosures. Yet somehow, the rose-colored glasses crowd (or those in the mainstream real estate business) fail to mention these important details and only mention the increase in home sales.
Some prior posts on the San Diego real estate market:
San Diego Condominium Sales Price Appreciation
San Diego Real Estate – Recovery or Collapse?
San Diego Real Estate Market … What Did You Expect?
San Diego Real Estate – 5th Largest Decline Through July
San Diego Home Sales Up … San Diego Home Median Price Drops
Southern California Home Prices Drop 34% in August
#1 Key To Purchasing Real Estate in the San Diego Market
San Diego California Home Sellers Lose Big
The San Diego California Real Estate Great Depression
California Home Prices Forecast to Fall 6% in 2009
Increasing Spiral in Home Prices
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Three more years of precipitous drops and I’ll be able to afford one….. YEA!
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Property prices are only beginning to tumble. They will stabilize when they finally hit or surpass equilibrium value as determined by their P/E Ratio.
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When I saw how the housing prices were going up, up, up and most peoples’ salaries didn’t pay enough to afford them, I knew the market was going to crash three or four years ago. Some real estate dealers and owners were just so incredibly greedy. They ask for a sales price or rent not based on how much they really need to charge to recover their expenses and make a reasonable profit, but on getting the maximum money for themselves, without regard for the effect on society.
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At the start of this debacle I thought the bankers had found a cheap and dirty way to get into the real estate business. That is: take the extra cash from the unwashed, leave them with debt and rent them the house they thought they were buying. As it turns out, either the American financial guru’s were asleep in Econ101, or the science of Economics is crap. I never could figure out the “consumer based economy,” apparently, neither have the financial folks. J.P. Morgan once quipped; “I can hire half the workers to kill the other half.” To his credit he never tried. Lenin and Trotsky one-upped Morgan by proving that they could talk workers into killing capitalists for free. I don’t know how this will turn out, but I am not sure that poverty is as bad as advertised.
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The 80/10 loan: You bought a house you can’t afford. Why should the bank bail you out? Jeez, you took out 2 loans because 1 bank knew you could not afford the house you wanted.
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The genesis of this meltdown is the outrageous decriminalization of usury by the United States Congress which allowed predatory lending at stratospheric interest rates, and the perversion of the Internal Revenue Code, rewarding layoffs of American workers, outsourcing of their jobs to the cheapest wog-land labor market, and the offshore relocation of fat-cat corporations with little or no tax liability. Home buyers are mostly what are known in the securities business as unsophisticated investors and when they have gotten sucked into adjustable rate mortgages just so they could get a tiny piece of the American Dream, little did they know that this most predictable of economic disasters would be laid mostly upon them. Congress is a club of millionaire whore lobbyists, run by big-money lobbyists. Example of how we’ve been screwed: the infamous Senate Bill 256, which forbids the discharge of medical and credit card debts, condemning its victims to a lifetime of fiscal misery.
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To those who think only low income people are losing their homes. WRONG….middle-class folks are losing their homes MORE than low income folks are. I think it makes some people feel good to try to put a rationale on this that it has to be people with low income, than to accept the fact that it is middle income folks more so.
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No matter how one looks at it, there’s always going to be housing markets that are overhyped. If somehow those markets can support whatever the hype is all about, the real estate price will remain high. If they don’t then house prices will plummet. A typical example of the latter is Southern Cal (San Diego and the Southern OC come to mind). SF is in an unusual situation. RE prices will continued to go up as long as people are willing to blow their money on housing, even if it’s exorbitantly overpriced. Meanwhile, the city’s infrastructure is crumbling. That can only go that far. As more and more middle-class people and families abandon SF, the city will be stuck with the hyper-rich and the indigent, neither of which will contribute much (or anything) to the tax-base. The moneyed rarely have any desire to plow money into their “beloved” city, and the indigent don’t have any. My bets are on “going down”.
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Seems there should have been more government regulation and tighter qualification for subprime mortgages in order to prevent what we’re now facing.
San Jose real estate attorneys
What were the government regulators doing while banks and mortgage brokers were issuing these subprime loans?
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