What San Diego Realtors have known for months is now being reported in the news. Demand for homes in San Diego exceeds current supply, and the result has been upward pressure on prices. For three consecutive months, in February, March, and April 2009, the median home price in San Diego County has increased. After reaching a low of $280,000 in January 2009, the median price increased to $285,000 in February, remained at $285,000 in March, and increased to $290,000 in April. And while this is no guarantee of future market performance, it is certainly positive news.
The price stabilization and renewed price appreciation has brought out first-time buyers and San Diego real estate investors in droves. Demand has increased into a sustained buying frenzy, particularly for entry-level homes in San Diego CA. Prospective buyers who are just now beginning to explore buying opportunities are discovering that there is a genuine shortage of housing inventory in most neighborhoods.
Take Rancho Bernardo for example. Rancho Bernardo is an attractive San Diego suburb in the top-rated Poway school district. On May 21, 2009 there were only 22 homes priced under $400,000 (primarily condos and townhouses) available for sale in Rancho Bernardo zip code 92127. Of these 22 properties, 20 are short sales, 1 is a bank-owned REO foreclosure property, and 1 is a traditional sale being offered by a home seller with equity in the home.
Why so many short sales? Because the short sales remain on the San Diego MLS as “Active” listings for an average 6 months, and up to a year or more, “Pending Lender Approval of the Short Sale.”
A closer look at these Rancho Bernardo homes reveals that ALL BUT ONE of the 20 short sales has at least one accepted offer and most have multiple backup offers. Many of the MLS listing remarks say “no more showings at this time” simply because they have received so many offers that the real estate agents and home owners don’t need or want any more showing activity or any more offers.
Unless there is a major increase of entry-level housing inventory or a severe interest rate spike, it seems safe to say that the price stabilization is real, and more price appreciation should be expected in the coming months. There simply aren’t enough properties for sale to satisfy demand at today’s home prices in San Diego County.