From the North County Times:
For the first time since home prices started diving three years ago, the median price for a house in North County showed a meaningful uptick in April, a sign the region’s housing market might be transitioning toward stability.
To be sure, there remain substantial pressures on the market that could push prices down further.
Nonetheless, the increase in the median price – the middle point of all sales – is significant.
In April the median price for a detached house was $390,000, an increase from $364,000 in March but still down 24 percent from $510,000 a year earlier, according to a report released Friday by the North San Diego County Association of Realtors.
At the same time, the report showed two distinctly different markets: the high-end, with few foreclosures and no sales; and the low-end, with lots of foreclosures and booming sales.
For example, the market in Del Mar has 30 months of inventory, a measure of how long it would take to sell all active listings based on last month’s sales rate. That is five times higher than the six months of inventory that is widely considered to describe a normal Southern California market.
On the other hand, western Vista showed two months of inventory.
Further, that same ZIP code in Vista – 92083 – has more homes that are “pending,” meaning the sales are in escrow and could close in May, than active listings for sale, according to numbers provided by Jim Klinge, a real estate agent in Carlsbad.
“That is smoking,” Klinge said. “You could be 10 percent too high on price and sell right now because of this frenzy on the low end.”
Indeed, several real estate agents have reported that there are so many buyers interested in low-priced foreclosures that bidding wars have erupted, with 10 to 20 offers per listing.
At the same time, the median price is a crude metric that does not necessarily translate to overall price increases. It is simply the middle point of all homes that sold in April.
Robert Brown, an economics professor at Cal State San Marcos who compiles the HomeDex report for the Realtors association, said the market is split into three segments: red-hot sales on the low-end; a slight resurgence in homes priced from $400,000 to $600,000; and very few sales in the high end.
Indeed, the median price increase could be the result of more “normal” sellers getting into the market – homeowners who have taken care of their properties commanding a premium over a glut of beat-up foreclosures, said Kurt Kinsey, a real estate agent in Oceanside.
And buyers are looking to stay in the home for longer, meaning they might be willing to pay more, Kinsey said.
“A home is becoming a home again,” he said, speculating that the average homeowner during the last few years moved after two years and that time in a home is going to increase to five years.
HomeDex reported relatively mild sales for North County, increasing 6 percent from a year ago to 723 sales in April – well below the 1,117 houses sold in April 2005.
And even the increasing median price left plenty of room for uncertainty, with some analysts hesitant to declare recovery for the housing market.
“It’s hard to say,” said Brown, the economics professor. “We did have this little bump up, but I don’t expect any major price movement barring something happening.”
For Brown and other analysts, the largest area of concern is a glut of “pre-foreclosures,” representing mortgages in default but not yet seized by the bank.
In March, North County set a new high for this recession in such default notices. April numbers, due out early next week, are expected to be just as large.
And even though areas such as western Vista have just as many homes in the sales process as homes up for sale, those pre-foreclosures loom.
Indeed, despite booming sales in western Vista, for every home sold, two others were in default, according to ForeclosureRadar, a tracking firm in Northern California.
Analysts say banks have slowed the foreclosure process, meaning thousands of homes in foreclosure have not hit the market.
For even more skepticism, Klinge, the Carlsbad real estate agent, said the buying frenzy on low-end properties could be purely seasonal – sales traditionally pick up during the summer.
“My guess is it will settle down again,” Klinge said regarding the emerging bidding wars and 10 to 15 offers per listing. “You’ve got a bunch more foreclosures coming on, so when you get to the last three to four months of this year, you’ll get one to two offers – if you’re lucky.”
ZACH MENTIONED THE GLUT OF PRE-FORECLOSURES
(I’d guess that 25% are in MLS active or pending already)
Carlsbad to Carmel Valley, attached and detached:
Active listings in MLS = 1,666
Pending Listing in MLS = 431
NOD, NOTS, REOs = 1,977 (x 75% = 1,482)
Total solds Jan 1- April 30:
1997 = 904
1998 = 1,051
1999 = 1,131
2000 = 1,248
2001 = 1,015
2002 = 1,347
2003 = 1,227
2004 = 1,297
2005 = 1,155
2006 = 907
2007 = 912
2008 = 646
2009 = 562