Real Estate Trends June 2007
Team Weurding Realty
It was my original intent to focus on how the home prices have shifted over this past year. This could be done by showing the percentages of inventory in the different price ranges and then comparing the two years. It turned out exactly as I had expected. The percentage of inventory in the upper price ranges was declining, while the percentage of the total inventory in the lower price ranges was increasing, indicating a downward shift in prices. Before the sellers, or for that matter the buyers, get too excited, the shift has been somewhat gradual and seems to be affecting the upper end of the market the most.
The only exception to this trend was RB 92127 where 87.5% of their total housing inventory is priced over $600K, up from 84.9% at this time last year. San Diego county as a whole, saw the over S600K inventory drop by roughly 5.5% , while the $200K - $400K price range actually increased by the same 5.5%. The balance of the market saw very little shift in numbers.
What turned out to be far more dramatic was the shift in housing prices over the past five years. Check out the attached chart and you will notice the S200K - $400K price range made up a large share of the market in 2002, while today there are very few homes in this price range. The $400K- $600K price point is not consistent, with some zip codes increasing in numbers over the past five years and others actually going down. But don’t be fooled: RB 92127, RB 92128, and PQ actually jumped over this price point and created a large increase in the over $600K price range.
If a person compares the prices in 2002 with today’s prices, it becomes abundantly clear why fewer people can afford to purchase a home today without some form of creative financing. We are now discovering the problem with that. Short sales and foreclosures are increasing at an alarming rate.
Source: Sandicor, MLS, and Dataquick
