San Diego Real Estate Trends

2008 Year End Summary

Bob Weurding, Broker Associate
Team Weurding Realty

The year 2008 was by no means a good year for real estate in
San Diego County, but it was not “all” bad either, certainly not as bad as the National press has been reporting. To be honest, we began the year as one of the least affordable places in the country, with a housing affordability index of less than 10%. Something had to change and in our case it was price because it certainly was not the number of sales (demand). The number of home sales rose by 12.2% over 2007. While the “average” sales price for the county was off by 25.7% compared to 2007 numbers, that was not necessarily felt in every zip code.

The inventory level throughout the county managed to drop from 5.4 months worth of unsold listings in January of 2008 to its present level of 3.9 months. There are even some zip codes with less than a two month supply (a little low). If you understand the principle of supply and demand, this is an early indicator that prices are going back up, at least in parts of the county. To help support this theory, in December of 2008 the average price of home sales rose in 43 of the 101 zip codes throughout the county by 3.2% over the November prices, with 2.6% more sales. The number of pending sales (properties in escrow) also rose by 5.9%.

The problem we have with the news that most of us read in the local newspapers or hear on the TV tends to be more macro in nature, which tells us very little about specific neighborhoods. For that reason we took the time to break the numbers down by zip code so you will have a better idea on how your home value has actually been affected by the overall downturn in the economy. These numbers were compiled using only SFR (single family residence detached) homes and did not take into account new construction or attached homes. We then compared each of the different zip codes to the county average. As of January 1^st 2009 the percent of decline in prices for the entire county was 25.7%.

There are 101 zip codes that make up San Diego County. Nine of those zip codes actually reported no loss of value or actually increased in value.

ZIP CODE                              AREA                         AVG SALES PRICE 2007 to 2008

92107                                      Ocean Beach                No loss

92121                                      Sorrento Mesa              Increased   1%

92075                                      Solana Beach                Increased   4%

92066                                      Ranchita                        Increased  12%

92067                                      Rancho Santa Fe           Increased  14%

91931                                      Guatay                          Increased  18%

92070                                      Santa Ysabell                Increased  38%

92086                                      Warner Springs             Increased  40%

91948                                      Mt Laguna                    Increased  101%

Twelve of the zip codes ended the year with less than a 10% decrease in value. Remember, this is after years of steady increases.

ZIP CODE                              AREA                         AVG SALES PRICE 2007 TO 2008

92110                                      Old Town                    Decreased   .5%

92118                                      Coronado                    Decreased   .7%

92130                                      Carmel Valley              Decreased   .8%

91978                                      Spring Valley               Decreased  1.7%

92106                                      Point Loma                  Decreased  6.1%

92122                                      University City             Decreased  7.5%

92010                                      Carlsbad                      Decreased  7.8%

92037                                      LaJolla                         Decreased  9.1%

92009                                      Carlsbad (La Costa)    Decreased  9.4%

92101                                      S D Centre City           Decreased  9.4%

92011                                      Carlsbad                      Decreased  9.5%

92124                                      Tierrasanta                   Decreased  9.6%

On the other end of the scale, twenty six of the zip codes lost more than 30% in value. We don’t believe it would be much of a stretch to say that most of these areas were the hardest hit with short sales and foreclosures mostly due to all of the risky and bad loans that many of these residents got involved with.

ZIP CODE                              AREA                         AVG SALES PRICE 2007 to 2008

91905                                      Boulevard                     Decreased  55.1%

92003                                      Bonsall                          Decreased  52.2%

92061                                      Pauma Valley                Decreased  46.8%

92059                                      Pala                              Decreased  45.8%

92113                                      Logan Heights               Decreased  41.8%

92114                                      Encanto                        Decreased  38.4%

92105                                      City Heights                  Decreased  37.9%

91950                                      National City                Decreased  37.4%

92025                                      Escondido                    Decreased  37.2%

92173                                      San Ysidro                   Decreased  35.4%

91945                                      Lemon Grove               Decreased  35.3%

91911                                      Chula Vista                   Decreased  34.7%

92139                                      Paradise Hills                Decreased  34.0%

92027                                      Escondido                    Decreased  33.9%

92020                                      El Cajon                       Decreased  33.6%

91906                                      Campo                         Decreased  33.5%

92083                                      Vista                            Decreased  33.1%

92060                                      Palomar Mtn.               Decreased  33.0%

92084                                      Vista                            Decreased  32.7%

91977                                      Spring Valley                Decreased  31.7%

92154                                      Otay Mesa                   Decreased  31.3%

91910                                      Chula Vista                   Decreased  30.9%

92057                                      Oceanside                     Decreased  30.4%

92036                                      Julian                            Decreased  30.4%

92102                                      S D Chollas View         Decreased  30.3%

92115                                      S D East                       Decreased  30.2%

If your area in San Diego County is not included in this report, and you would like more information please give us a call or email and we would be more than happy to assist you. Likewise, if you know somebody that would benefit from the services that we provide our clients please call or email us with their name and contact information and we will take it from there.

Personally we are looking for great things in 2009. May your lives be blessed with prosperity and good health in the New Year…

Real Estate Trends
April 2008

Bob Weurding, Broker Associate
Team Weurding Realty

If I have learned anything in the ten plus years that I have been researching and writing this article, it is to avoid using only the statistics that support what has become the popular opinion of today’s real estate market.

We all know that statistics can truly tell any story that the author wishes simply by selecting only the stats that support his/her viewpoint. We find that to be the case nearly every week in the media, and that could easily have been the case for this month’s article. When I started my research I fully expected a different outcome. As active Realtors we have been experiencing multiple offers on nearly every property on which we have been writing contracts for our clients. When I heard other agents were finding the same thing, I began to think that the real estate business was actually starting to pick up, unfortunately that did not prove to be true.

For example, when I compared the first three months of 2007 to the first three months of 2008 the total number of SFR sales in the county are off by more than 25% from last year. Poway’s sales numbers are down by 30%, RB 92127 is down 19.5%, the number of home sales in RB 92128 are off 44.5%, and PQ 92129 has only managed to sell 50% of last year’s total of 82, or 41 sales in the first three months of 2008.

Now we could stop right here and leave the reader with the impression that 2008 is off to a dismal start and that all is bad. However, the number of sales is only one factor when evaluating the real estate market. There is a little thing called sales price! Normally with a huge amount of available housing inventory, and the demonstrated lack of demand, you would expect sale prices to be in a free fall but that simply has not been the case, at least in our local marketplace.

Again, if we compare the first three months of 2007 with the same period in 2008, Poway’s average SFR sales price is actually 102% of last year’s $807,042. RB 92127 is off by 9.8%, RB 92128 is only down slightly to 98.1% of last year’s average. PQ 92129 rounds out our market with a 6.1% decrease in sales price.

Given all the other factors, these are certainly not all that bad. Let us not forget that home prices have been on a steady increase for several years and had to stop at some point to re-adjust to the economy.

Source: Sandicor, MLS, and Dataquick

Bob Weurding, Broker Associate
Team Weurding Realty

The percentage of homes in the $300 — 400K price range has increased from only 4.5% in 2006 to 22.3% today. With all the turmoil in housing prices, the percentage of homes priced for sale between $400 — 500K has remained somewhat stable during the past three years. In 2006 they made up 20.8% of the available inventory and today that number is 21.3%.

We start to see the more dramatic downward shifts when prices go over the $500K mark. The percentage of homes in the entire county that are priced between $500 - 600K has dropped from 23.5% in 2006, down to 21.3% in 2007, and is currently sitting at 14.3% today. That same trend occurred when the homes were priced over $600K. In 2006 over 50% of all the SFR listings were priced more than $600K. That number went down to 44.9% in 2007 and is currently at 32.6%.

Obviously with some exceptions, these numbers are telling me that the higher priced homes are starting to sell for less, causing the number of homes selling for less money to increase. The equilibrium point for the county seems to be the $400 — 500K price range. There is no single point of balance in our local 1-15 market as you can see from the attached chart. The only price range that is consistent with the County’s trend are the homes that are priced over $600K.

After reading the article in last Wednesday’s UT, I decided to also see exactly how much the short sale market  was impacting on the I-15 communities. To do this, I pulled all 656 active SFR listings and discovered the following: 26.3% of Poway’s active listings were in some form of short sale distress. 23.1% of RB92127’s listings faced the same problem, proving that the issue doesn’t seem to have any economic boundary. RB92128 had the fewest short sale listings with 14.4%, while PQ92129 was high with 30.8%. Hopefully the program awaiting President Bush’s signature will help to ease this growing problem.

Source: Sandicor, MLS, and Dataquick


 

If you are able to read this article on a regular basis, you will recall that last month I predicted that the housing inventory would continue to shrink until sometime after the first of the year. Actually, that happens to be a no-brainer because it happens every year. 

And yet the only “logical” reason that I can think of is there are a lot of sellers out there who don’t really want or need to sell their home. Why else would they remove themselves from the selling process for up to two months, disrupt their agents’ marketing plan, and completely eliminate their chances of selling at a time the competition is resting on the sidelines.
 

For example, during the month of November there were 958 sales of single family detached homes throughout the county and there were 559 fewer sellers participating in the process. Now granted, the 958 sales were below the normal monthly average of 1354 sales, but nevertheless, it was still a large enough number of sales to be a part of.

A similar scenario was also taking place in Poway , both of the Rancho Bernardo zip codes, and Rancho Penasquitos. The reductions ranged from 4.5% of the inventory in RB 92128 to a 13.2% drop in Poway . With Poway ’s current sagging sales, it certainly was not the time to take a break.
 

Next month I plan to do the year end summary of both our marketplace and the county as a whole. However, I think it is safe to say unless you live in RB 92127, there is not going to be a lot to cheer about. The most dramatic statistic I found for 2007 was the significant drop in the total number of sales that were recorded. Once again, I urge you to keep in mind we are comparing to 2006 which was a record setting year and a tough act to follow.
 

TeamWeurding (Bob & Emily) would like to wish you a very Happy, Healthy, and Prosperous Holiday Season and New Year.

Source: Sandicor, MLS, and Dataquick

Don’t you just hate it when you are only told part of a story? If I have learned anything over the past 10 years researching the real estate market for this article, it is that numbers do not lie, but they can certainly represent the facts differently. We see and hear it all the time when reading or hearing about the state of our real estate market. Therefore, my intent is to always provide the reader with “all” of the facts so they can make an informed decision when it comes to real estate matters.

When reading an article on real estate statistics, the reader needs to understand:

1. The different points of comparison. For example, it is only natural to compare the current year to last year, but when last year was the 4th best year ever in real estate, this year is bound to look bad.

2. Depending on the specific marketplace, both median and average prices can distort the facts. Average works well when there is not a big spread in the prices such as 92128 or 92129. When looking at 92127 & 92064, a million dollar home and a $600,000 home average $800,000 which means nothing. Median price is not much help either.
 
3. Short periods of time like month to month can be inaccurate due to the ups and downs in a typical real estate cycle. A longer period of time is usually better.
 
4. Lastly, it is dangerous to compare a whole county when it comes to real estate statistics because there are so many variables that make for different results from neighborhood to neighborhood.

By now you may be wondering what is my point in all of this? After reading and hearing all the doom and gloom about our current real estate market, I feel we need to hear more relevant information as it pertains to “our” neighborhoods.

The number of SFR home sales (YTD) for the county are off by 17.1% from last year. Poway is off by 14.6%, RB92128 is down by 9.7%, PQ92129 is only off by 7.3% and RB92127 is actually up 9.5%. (Don’t forget we are comparing to 2006).

The median sales price of a home for the past 10 months in the county is down 5.6% from the same period in 2006. Poway is down less than 1%, RB92128 is off 3.1%, PQ92129 is down 2.3% and again, RB92127is up 5.7%.

By the way, inventory is down across the board from September and if history repeats itself it will go down again in both November and December. It will once again increase after the Holidays. If you are a seller, this should be sending you a message to keep your home active during the holidays. Why not take advantage of the opportunity provided to you by your competition?

Source: Sandicor, MLS, and Dataquick

Last month I introduced you to the concept of “Market Velocity” and how it can be used to gauge sales activity in the real estate industry. In addition to keeping track of the number of active listings, along with the number of pending sales, the formula also takes into consideration the current market conditions. As you might imagine all of this is very fluid and can change dramatically when there is a shift in any of these factors.

That “shift” took place these past 30 days when the number of active listings either increased or held at last month’s totals, while the number of pending went down significantly across the board. I have been tracking the numbers since 1988, when I first became licensed as a Realtor, and I can not remember when the percentage of homes under contract (sold pending) has been so low. In all of San Diego County only 11.1% of the active inventory is in escrow. Put another way, 88.9% are still looking for a buyer. Unless something changes, that means we have 436 days worth of inventory to sell!
 

Thanks to the sagging number of sales, all of the zip codes in our marketplace also shot up this past month. With only 15 new sales, Poway now has 406 days of unsold homes. RB 92127 currently has 320 days of standing inventory, up from 187 days last month. RB 92128 went from 149 days worth of unsold inventory last month to 210 days today. And lastly, PQ jumped up from the previous low of 114 days to 222 days.
 

Some other numbers you might find interesting include: More than 53% of Poway ’s homes for sale are listed over $600K yet only 3.7% of them are in escrow. Of PQ’s 136 active listings only 5 are priced under $500K. In RB 92127 more than 56% of the listings are priced over 1 million dollars. Your best chance of finding a home under $500K is in RB 92128 but in many of them you have to be over 55 years young in order to qualify for the purchase.
 

In my opinion, the cause-for the large drop in sales is related to all the confusion within the banking industry, which can be fixed. It just might take awhile.

Source: Sandicor, MLS, and Dataquick

I was recently introduced to another way of looking at the market statistics, sometimes referred to as “Market Velocity.” What this system does is take a look at the relationship between the total number of active listings and the number of pending sales during the last 30 days. Next, it calculates using these numbers and the current market conditions to determine how long it would take to sell off the existing inventory of homes.

I used only the SFR (Single Family Detached Homes) and created a graph (See attached) showing the data for San Diego County . If you check the graph you can see how much the

estimated sale time has changed since January. The current number of days reflect a total of 290 days. This figure has fluctuated from a low of 188 days in March to the current high for 2007 of 290 days in August.

When looking at our local market, I discovered, as usual, that we are in somewhat better shape then the rest of the county as a whole. Poway ’s market velocity is 139 days based on 199 active listings and the 43 pending sales for August. RB 92127’s total days are currently much higher then Poway ’s with a 187 total which also happens to be the highest total in our local marketplace. Even so, this is still much lower then the county’s total of 290 days of inventory.

Based on 208 active listings and 42 pending sales, RB 92128 reports in at 149 days. Rancho Penasquitos has the lowest total of the I-15 communities with a score of 114 days. This is lower because PQ has fewer active listings (110) and yet has 29 sold pending in August.

The bottom line is really quite simple, and reflects what I said last month about National and County statistics. They do not always reflect what is happening in our own back yard. For that matter there is even a significant difference between RB 92127 and PQ 92129 making it imperative to utilize a local Realtor who knows your neighborhood. You will be glad you did if you are planning to buy or sell a home.
 

Source: Sandicor, MLS, and Dataquick