San Diego

Inventory increased in all categories, including new inventory. Pendings were almost identical to March with the exception of multi-family. Pendings increased by 11 properties or 38% over March for 2-4 unit properties.

Prices have fallen an average of 19%, foreclosures have risen 128% compared to last year. New Construction is at its lowest level since November 1992.

http://www.signonsandiego.com/uniontrib/20080501/news_1b1sdecon.html

What does this mean to investors? We know that as soon as the current inventory returns to normal levels and the market has worked through the foreclosures, there will be increased demand for existing properties, because new construction two or three years from now will be minimal. Traditional economics tells us there will be rising prices as well as increases in the rental market.

Note: New Listings also include any price ranges/modifications to a listing made during the month, thus the # of new listings most likely will be overstated. This is the way the MLS reports, and I’m unable to calculate this any other meaningful way.

-- Jeannie

San Diego

Inventory increased in all categories, including new inventory. Pendings declined slightly.

The Case-Schiller Index reflected a 16.7% decline in San Diego Home prices when comparing January 2008 to January 2007. If you enjoy detailed analysis, check this out. http://tinyurl.com/3x5p34

The above index is always two months behind, thus the reason I like to do my own statistics. In the current market the key indicators are inventory and properties going into escrow (pendings).

I have encountered a substantial increase in buyers as well as investor interest in the last 30 days. Of course all buyers expect to enjoy a great purchase price, but that is relatively easy to do currently. Banks holding REO are now pricing properties very competitively and multiple offers occur on all of these. This is good news since it proves there is a lot of cash on the sidelines waiting for the right transaction, and there is a floor as to how low prices will go.

In most cases we are under replacement cost. I feel anytime you purchase for less than it costs to duplicate the property, there is a built-in profit as soon as market recovery begins.

Note: New Listings also include any price ranges/modifications to a listing made during the month, thus the # of new listings most likely will be overstated. This is the way the MLS reports, and I’m unable to calculate this any other meaningful way.

-- Jeannie

San Diego

Inventory remained the same, sales increased slightly and the rate of new listings coming on the market slowed substantially. I think this is slightly skewed because January had a lot of new listings primarily because sellers had held off listing their property until after the holidays.

The downtown condo market is filled with foreclosures. There are two great locations on Sixth Avenue where construction has stopped. As unique as the Balboa Park area is, even that area is sustaining some problems. There are some great buys at present throughout the city.

It seems like banks are becoming more willing to discount their REO properties just to get them out of inventory. I have seen several situations where properties sold for 60% of what they sold for two years ago!

I believe the Fed will cut interest rates again, but since mortgage rates are tied to 10 year treasuries, the decrease in interest rate doesn’t directly impact mortgage rates.

I still believe in San Diego real estate. San Diego is really “Americas Finest City”. Great Weather, a million things to do, and a big city with a small town feel. For the first time in two and one half years I truly feel it is a great time to buy real estate.

Note: New Listings also include any price ranges/modifications to a listing made during the month, thus the # of new listings most likely will be overstated. This is the way the MLS reports, and I’m unable to calculate this any other meaningful way.

-- Jeannie

San Diego Area

New Listings increased substantially this month, in fact it doubled or more in every category. This could be expected because of owners waiting until after the holidays to place their property for sale. Pendings increased slightly but nothing significant. In some instances, properties are selling for less than replacement cost, mostly REOS (Real Estate Owned/Foreclosure Properties).

From what I am observing, it appears banks are becoming more aggressive in pricing their foreclosed properties at low prices to generate a more rapid sale. This hopefully, will expedite sales and get the market back to stabilizing.

The recent interest rate cut by the Federal Reserve Board has not had an impact either way on the real estate market. Mortgage rates are set by the 10 year treasury auction, therefore any increase/reduction was already factored into the market at an earlier date. The only upside to the interest rate cut is a psychological one, i.e., positive news for a change rather than more statistics on sub prime foreclosures.

Note: New Listings also include any price ranges/modifications to a listing made during the month, thus the # of new listings most likely will be overstated. This is the way the MLS reports, and I’m unable to calculate this any other meaningful way.

-- Jeannie

San Diego Area

ALL areas improved this month!!! Traditionally December is a slow month for real estate activity. New listings were a lesser amount, which was to be expected. Sales held the same as for November or increased.

Moodys as well as the Anderson Report from UCLA have stated “San Diego probably would be the first area to recover”. We have now had two months of positive news after October 2007 which was the WORST month since I have been doing the Market Watch.

If January 2008 continues with positive data, I would project San Diego is on its way to stability and improvement.

Note: New Listings also include any price ranges/modifications to a listing made during the month of September, thus the # of new listings most likely will be overstated. This is the way the MLS reports, and I’m unable to calculate this any other meaningful way.

-- Jeannie

All areas showed a slight improvement this month, even with the Thanksgiving Holiday. October reflected the worst sales of the year, however that was the month most impacted by the constant negative news about the sub-prime and credit issues.

Downtown condos are back to normal! October had only two properties go into escrow, but we are now back to normal with 15 in November. Again, I attribute the “halt in sales for October” to the psychological impact on buyers of the constant barrage of negative news about the credit markets. Several new projects are coming on line for sale in the area of Balboa Park. One property at Sixth and Redwood has temporarily halted construction.

Luxury Condo Project On Hold

I’m excited about this project as it is in an awesome location, and I’m anxiously awaiting completion and pricing. Condos directly facing Sixth Avenue will be a limited supply product, i.e., there is not an infinite number of properties that can be built directly overlooking the park.

Multi-family sales were slightly lower than in October, however they have been pretty consistent though out the last six months. Rents are stable and multi-family prices are dropping, making multi-family once again “income property”. We’re not quite to the point where I am ready to buy or recommend a purchase to clients, but we are getting closer.

Note: New Listings also include any price ranges/modifications to a listing made during the month of September, thus the # of new listings most likely will be overstated. This is the way the MLS reports, and I’m unable to calculate this any other meaningful way.

-- Jeannie

I know I’m repeating myself, but pay attention to the numbers. (review my article…”Understanding Forclosure Numbers!!!”on the web site). Small numerical changes create HUGE differences in ratios/percentages. The number of sales for downtown condos was 8 in September. In October there were six fewer sales than in September. Total inventory remained a constant, however the ratio of new listings to sales was 28 to one for October!

The real estate market is encountering tough times and a huge slowdown. To see the true picture it’s imperative to view actual numbers with percentages and ratios.

The downtown condo market has slowed substantially. I still like downtown, both to live as well as an investment. It’s better than Manhattan! All the fun things to do, the activity, the excitement with no snow, ice, humidity or bugs.

The good news this month was that multi-family pendings increased, inventory declined and the sales as a percent of inventory rose to 7.5%. Not a great number but this number would be much higher if listing brokers and sellers realized it is imperative to properly price a property and provide accurate financial data.

The market also was impacted this month by the horrendous fires. International Relief Teams that was started by my good friend Barry LaForgia has been helping people that have lost their homes. Check out their site at www.irteams.org or better yet, make a donation. Their phone number is 619-284-7979.

Note: New Listings also include any price ranges/modifications to a listing made during the month of September, thus the # of new listings most likely will be overstated. This is the way the MLS reports, and I’m unable to calculate this any other meaningful way.

-- Jeannie

Total Inventory has dropped most likely from expired listings. Sales as a percentage of inventory rose for Single Family Homes in Encinitas but that was because of declining inventory. Downtown condos sales declined the most of any product on the list. One possible reason is the constant barrage of negative news about Downtown San Diego in Money Magazine/CNN. All of the above data however have small numbers so any change reflects a sizable change in the percentage. Review my article “Foreclosures….understanding the Numbers” on the web site.

Note: New Listings also include any price ranges/modifications to a listing made during the month of September,, thus the # of new listings most likely will be overstated. This is the way the MLS reports and I’m unable to calculate this any other meaningful way.

-- Jeannie

Note: New Listings also include any price ranges/modifications to a listing made during the month of August, thus the # of new listings most likely will be overstated. This is the way the MLS reports and I’m unable to calculate this any other meaningful way.

August was the worst month for real estate news in the media that I have encountered. A sharp spike in foreclosure filings, further concerns about sub-prime loans, and chaos in the credit markets. I anxiously await the September 18th meeting of the Federal Reserve.

The number of properties that went into escrow reflects worry about the future of housing. Properties going into escrow declined in all categories, with the greatest drop in the 2-4 unit category.

-- Jeannie

Note: New Listings also include any price ranges/modifications to a listing made during the month of July, thus the # of new listings most likely will be overstated. This is the way the MLS reports and I’m unable to calculate this any other meaningful way.

A great article to check out about San Diego Real Estate: http://www.voiceofsandiego.org/articles/2007/08/07/housing/923dqjune071707.txt. Somewhat scary and possibly true reading, however this demonstrates the diverse opinions that are prevalent in the current real estate climate. As I keep repeating myself, it is critical to maintain proper liquidity………if the worst case happens, you are prepared…….if the market does better than anticipated you have extra cash on hand!

-- Jeannie