10 April 2006

San Diego Housing Market

Realty Times - Real Estate News and Advice - Local Market Conditions: "March & 1st Quarter 2006: San Diego Housing Market - single family detached and attached: Inventory increases and demand declines continue. Sales finished the month at 2,844 homes sold versus 3,885 sold in March 2005, down 28%. Based on the March pending sales of about 3,100, April is forecast to be down from last April's 4,134 by 25%. This downward trend in sales began in earnest in the last quarter and seems to be accelerating. The first quarter sales were 6,743 sold versus 8,905 in the same period last year. This is down about 25% year to year. Typically the first quarter makes up about 22% of annual sales, if this holds true this year we are on track to sell 30,650 homes this year. This compares with 41,122 in 2005 and 42,876 in 2004. This is a far bigger drop than I expected, I was thinking more in the 35,000 range which I thought might cause some problems. Goes to show what I know. This drop in sales is happening at the same time that inventory continues to grow; we are now at 17,833 about 6 months supply. The average price for the month was $635,775, up 11% from last March. Don't get excited or misled, prices did not go up. The under $500,000 sales made up 45% of the sales volume versus 55% last year, this mix change pushed up the average price because of the sale of more expensive homes. This is not due to a lack of homes for sale, the under $500,000 inventory stands at about 8,300 - 158 days supply - or 47% of total inventory. Another item to watch in average price is that in some cases sellers are beginning to pay all or some of the buyer closing costs which is being financed in the selling price. This has the effect of raising the price of the home by about 2%."

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