The county is experiencing multiple offers and price increases, mostly among houses priced in the $400,000 range.
This has caused a surge in sales in the county’s outlying areas, such as El Cajon, while areas such as La Jolla aren’t seeing quite as much activity on properties priced above $2 million.
“We have seen an improvement in our marketplace… more offers, multiple offers and subsequent price increases,” said Andrew Nelson, president and CEO at Willis Allen Real Estate. “But this activity is primarily in our community’s lower pricing categories, i.e. under $2 million. … We don’t have $400,000 or so priced product in La Jolla. That is why El Cajon and many of San Diego’s wonderful outlying communities have seen a surge. Pent-up demand and very affordable interest rates have fueled this growth.”
There are 1.5 months of inventory on the market in the county, according to John Altman, Realtor, broker and owner of JT Altman & Associates. For properties under $430,000, there are only 24 days of inventory.
El Cajon’s median price in April was $417,000, up 34 percent from April 2012. The year-to-date median price in El Cajon in April was $385,000, up 20 percent from the same time last year, according to data collected by the Greater San Diego Association of Realtors.
Homes in El Cajon are spending a median of 72 days on the market year-to-date in April, down from 91 days during the same time period in 2012.
In La Jolla, the median price in April dropped from April 2012. It was $1,575,000 in April, down about 7 percent from $1,692,500 in April 2012.
Nelson said this drop isn’t something to worry about.
“We cannot micromanage this market. We believe the long-term trend is improving. Prices are more stable, and as we see additional sales in homes priced above $3 million, prices will again enjoy a modest growth,” Nelson said.
Year-to-date in April, La Jolla’s median price increased 5.9 percent to $1,482,416 from $1,400,000 in 2012.
Houses in La Jolla spent 59 percent fewer days on the market in April compared to April 2012. Year-to-date, La Jolla homes spent 72 days on the market, down 33.33 percent from 108 days in 2012.
“Sales in La Jolla are quite good and there have been several sales over $3 million so far this year,” said Alan Nevin, principal at The London Group.
In downtown San Diego, prices were up 15 percent in the first quarter from the first quarter in 2012, according to Nevin. There were 227 sales in the first quarter, up from 204 in 2012. Forty-one percent of the buyers were all-cash buyers.
“Downtown is doing beautifully in terms of sales and pricing, but no new product is on the horizon before 2015-16, and that is driving prices up,” Nevin said.
There were three foreclosures in the first quarter downtown, according to Nevin. Countywide, the total number of distressed properties available for sale is below 6 percent of the total market, Altman said.
“All across the county, every region is down in the number of total distressed transactions -- that’s the total number of bank REOs and short sales combined,” Altman said.
In the 90 days as of May 23, the metro central area, which includes ZIP codes 92101, 92012, 92113 and 92114 saw a decrease in distressed transactions of 45 percent. In that same time period, East County saw a decrease of 37.7 percent. And coastal south, which includes La Jolla, Point Loma, Ocean Beach and Pacific Beach, saw a decrease of 42.2 percent in distressed transactions, Altman said.
There are still about 200,000 homeowners mathematically upside down in the market, Altman said, which could cause a possible resurgence if interest rates go up. On average, those borrowers are upside down by about 20 percent, Altman said.
“The market really has to have positive movement for those properties to come back to par,” Altman said. “A lot of people think the market is going to recover enough to get out of this mess. I don’t think they’re right. As soon as the market begins to show recovery, the Feds are going to allow rates to increase.”
1131 Wall St.
La Jolla, CA 92037
Nov. 20 1014 -- George Chamberlin speaks with Dr. Lynn Reaser, chief economist for Point Loma Nazarene University at the Fermanian Business & Economic Institute, and Leslie Kilpatrick, 2014 president of the Greater San Diego Association of Realtors, about recovery in the local real estate market.
June 26, 2104 -- George Chamberlin speaks with Leslie Kilpatrick, president of the Greater San Diego Association of Realtors, and Donald Coleman, vice president of real estate member experience for USE Credit Union, about what's happening in the residential real estate market and the role a credit union can play in buying a home.