Re. San Diego Homes Sold in May

I’ve been blogging about the uptick of activity in the San Diego real estate market… and taking some grief for it. People are still scared and mostly skeptical about any optimistic reports involving real estate. I’ll be the first to admit that it has been a tough few years. Prices are down and there is still a lot of hardship. There is uncertainty regarding the future direction of interest rates, many people have been laid off of their jobs, and despite recent gains in the stock market, those gains are wobbly and the general economic news is not good.

But my job as a San Diego real estate professional is to call it like I see it. We are out there every day trying to help individuals and families buy homes in San Diego. The fact is that there is a shortage of homes for sale in San Diego and there are multiple offers on most properties that do come up for sale. Still, it’s difficult to believe these generalized statements without some statistics to support them.

Nationwide, in May 2009 the median price for a home increased 3.8% from April, to $173,000, which is down 16.8% from May 2008. Sales of existing homes rose to their highest level in seven months. This was a 2.4% increase as compared to April 2009. May was the second straight month that sales increased, and only 33% lower than the number of sales at the peak of the market in 2005. At the current pace there is a 10-month supply of homes nationwide.

In San Diego, median prices also increased in May, up 1.49% from April. But the number of sales fell by 1.81% to only 1,786 homes sold. This reflects the relative shortage of homes for sale in San Diego, CA. And it is instructive to look more closely at individual neighborhoods to see what types of homes are selling, how quickly they are selling, and how the sales prices compare to the list prices (asking prices). To do this I’ve put together a snapshot of two neighborhoods… Clairemont (92117) and Rancho Penasquitos (92129).

Clairemont is a neighborhood of entry-level homes in Central-Coastal San Diego. The homes tend to be on the small side, around 1,200 to 1,400 sq.ft. on average. Most of the houses were built in the 1950’s. The schools are good but not great. But the neighborhood is very centrally located with good access to downtown, La Jolla, Pacific Beach, Mission Bay, Mission Valley, and Interstate 5.

In May there were 32 houses that closed escrow (SOLD) in Clairemont. Of these, 8 were foreclosure properties, 5 were short sales (distress sales), and 19 were “traditional sales” by sellers with equity in their homes. The short sales drag out for months, so the average number of days on market was 43 days, although the median number of days on market was just 19 days. 37.5% of the 32 houses sold at or above their asking prices, with the average and median ratio of List Price/Sales Price at 98%. One bank-owned foreclosure house at 3683 Conrad Ave (4 Bedrooms, 2 Bathrooms, 1,558 sq.ft. of living area) was listed at $349,900, received many offers in just the first few days, and sold for $400,000 to a buyer with FHA financing (14% above list price, with Actual Market Time of 6 days). Multiple bids and overbids on foreclosure homes in San Diego has become the norm over the past year.

Clairemont Houses Sold in May 2009

	Beds	Baths	Sq.Ft.	High Price	Sold Price	%LP/SP	Days on Mkt
High	4	3	1,854	$589,000	$587,000	114	239
Low	2	1	726	$289,000	$271,000	86	0
Average	3	1	1,235	$403,687	$396,759	98	43
Median	3	2	1,200	$382,450	$375,447	98	19
Total Sold	32
Overbids	8	*Plus 4 Sold over low end of price range = 12 total overbids = 37.5% of all sales
Foreclosures	8	*25% (One-Fourth) of the total sales were foreclosures
Short Sales	5	*15.6% (Less than One-Sixth) of the total sales were short sales
Equity Sellers	19	*59.3% Almost 60% of the 32 homes sold in May were “traditional sales”

Rancho Penasquitos (92129) is a suburban neighborhood just East of Carmel Valley and Del Mar, located on the 56 Corridor between Interstate 5 and Interstate 15. It is an upper-middle-class neighborhood with excellent schools, in the Poway Unified School District. Houses in Rancho Penasquitos are mid-sized on average, typically 3 or 4 bedrooms, 3 or 4 bathrooms, and an average of 2,200 to 2,400 square feet of living area.

In May there were 30 houses that closed escrow (SOLD) in Rancho Penasquitos. Only five of these were foreclosure properties and one was a short sale, meaning that 80% of the houses sold in May were successful sales by sellers who had equity in their homes. Seven of the houses were purchased above the asking price, and eight more sold above the low end of the asking price range. So a total of 15 of the 30 sales, fully 50% of the homes, were technically overbid. The average number of days on market, the time required to sell the houses, was 31 days, but this as again skewed by a short sale that required 151 days. The median amount of time on the market was just 14 days.

Rancho Penasquitos Houses Sold In May 2009

	Beds	Baths	Sq.Ft.	High Price	Sold Price	%LP/SP	Days on Mkt
High	5	5	3,833	$929,000	$890,000	101	158
Low	2	2	1,423	$389,900	$380,000	91	32
Average	3	3	2,326	$632,087	$610,566	96	31
Median	4	3	2,217	$624,824	$622,500	96	14
Total Sold	30
Overbids	7	*Plus 8 sold over low end of price range = 15 total overbids = 50% of all sales
Foreclosures	5	*Only 16.7% (One-Sixth) of the total sales were foreclosures.
Short Sales	1	*Only 3.33% (One Thirtieth) of these sales was a short sale.
Equity Sellers	24	*Eighty Percent (80%) of the 30 homes sold in May were “traditional sales”

These two neighborhoods are quite different, but both tell the same story. San Diego home sales have picked up considerably. Many well-qualified prospective home buyers are finding it very difficult to get their offers accepted. This is particularly true with bank foreclosure properties that are being listed for sale below “market value” and attracting all-cash offers from investors. The banks tend to favor all-cash offers, even if the cash offers are lower than the mortgage financed offers. Sellers with equity in their homes are realizing that this is not such a bad time to sell after all. There is currently no shortage of demand for homes in San Diego.