Resales for attached and detached homes in San Diego County were up 25 percent from February to March. Median prices for homes sold were down month to month, with detached homes falling 3 percent to $325,000 and attached units falling 5 percent to $175,750.
According to the San Diego Association of Realtors (SDAR) on Wednesday, the 2,507 homes sold last month brought the total number of homes sold in the first quarter up to 6,922, a 53 percent increase from the same quarter in 2008.
The median price for a detached home sold in March 2008 was $440,000 compared to last month’s $325,000 — a difference of 26 percent, and 44 percent less than the median price in March 2007.
Despite the median prices being down, Tim Sullivan, President of Sullivan Group Real Estate Advisors, said the housing numbers show positive signs overall.
“Demand has been reignited,” he said.
“The good news and the most important thing is that the first stake in the sand for a turnaround is that we start to see an increase in sales. And the reason we’ve seen that is because of that continual decline in pricing.”
While an increase in home sales may take off some of the inventory on the market, last month’s record high notice of default filings in San Diego County will likely result in more foreclosures and short sales.
“In 2009, we’re going to be bringing foreclosures on almost as fast was we’re selling them,” said Sullivan.
The foreclosures are coming from a different source than people unable to pay off loans due to their mortgages resetting at high interest rates, said both Sullivan and Tony Pauker, chair of the Urban Land Institute’s San Diego Tijuana District.
“You heard all the drama about subprime and all this other stuff we’re now seeing a second bump on individual homes with the good borrowers with good credit with real mortgages are just going ‘I spent $600,000 on this home and it’s now worth $400,000? I’ve lost $200,000 of equity. Why bother?’ They’re just walking away,” said Pauker, who is also a principal at Encompass Urban Developers.
Sullivan, conversely, thinks the spike is likely due to job loss — a factor that he said will play a major role in the recovery process.
“We’re seeing foreclosures that are economically driven,” he said. “People are losing their jobs so they stop paying the mortgage.”
Job loss is the biggest threat to the stabilization of the housing market, said Sullivan.
However, he added that other factors for stabilization include consumer confidence and bringing down the amount of inventory in the market.
Many of the individuals buying lower-priced homes and foreclosures are investors.
Some market observers think investment homes paid for in all cash cannot be a true gauge for recovery.
However, some local real estate experts, like Norm Miller, have said it is possible a floor could be forming as long as there are sales.
“I can rent a place I couldn’t own before and an investor can get a good return. That’s two people who are happy,” said Miller, who is the director of real estate academic programs at the University of San Diego.