Source: rereport.com
San Diego County Property Sales Continued to Fall in 2007
We asked the question last year, after three years of falling sales, whether or not 2006 would prove to be the bottom of the market. And, the answer is in: NO! Of course, this begs the question of whether or not 2007 will prove to be the bottom of the market. Hmmmm?
None of the talking heads could have predicted the credit crunch that quite effectively reduced demand. I would say decimated demand, but, in realty, decimated means lopping off 10%. No, the credit crunch did more than that in the last half of 2007. Plus, we still have a plethora of adjustable rate mortgages rising upwards waiting in the wings.
Yet, there are still signs that this year may see the market finally hit bottom: Bank of America is buying Countrywide, which will provide stability to the mortgage market, and many Sovereign Funds are injecting liquidity into the mortgage market, albeit not through any altruism, but because they’re buying assets for pennies on the dollar. Plus, the Fed will probably continue to lower interest rates, which will provide relief for consumer debt. Remember though, the Fed’s actions have little if no effect on fixed mortgage rates.
On the the numbers. Sales of single-family, re-sale homes in 2007 were down for the fourth year in a row in San Diego County: falling 16.5%, a relief after the 23.4% drop in 2006. Condo sales were down 12.6%, compared to a drop of 26.1% in 2006. Another thing to remember, the lofty sales figures for 2002, 2003 and 2004, when sales peaked, where due to investor activity, not the simple supply and demand of people who wanted to buy homes to live in.
The median price for re-sale homes dropped 1.7%, the first drop since we’ve been keeping records: 1998. Of note, the average price rose 1.4%. This is a tale of two markets. The entry level market has been creamed by the credit crunch because buyers in this segment of the market depended upon no-doc and 100% financing loans to buy homes. These loans are gone, completely.
The $1,000,000 plus market has, therefore, become a larger percentage of total sales, which has had the effect of keeping statistical prices higher than reality.
Of course, statistical prices have absolutely no bearing on what your home is worth or what you can buy a home for. That depends entirely upon the agreement you make with the buyer or seller.
As you go through the various charts and tables in this report, you will see that the lower priced cities have, for the most part, suffered the greatest decrease in sales.
Will the market bottom out this year? Perhaps. Probably not before the summer. In any event, subscribe to this report and stay tuned.
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DEFINITIONS
- Median Price
- Median Price is the price at which 50% of properties sold were above that price and 50% were below.
- Average Price
- Average Price is the sum of all prices divided by the number of sales.
- DOM
- Average Days on Market is calculated from when a property was first put on the market until it was put under contract, or taken off the market.
- SP/LP
- The average selling price divided by the average list price.
Tags: Oceanside Real Estate, San Diego County Home Sales, San Diego County Real Estate Report
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