Three posts back we saw that the selling seasons have been steady the last three years.
Let’s take a closer look.
The overall SD inventory today is down to 6,214 attached and detached homes for sale, so I think this chart must include the contingents, which today total 4,373 listings. But you can see that in the 2010 and 2011 selling seasons, there were over 15,000 listings:
San Diego Housing Inventory
In spite of (or because of?) the drastically lower inventory this year, detached NSDCC sales rose +20% this year. Contributing factors appear to be lower mortgage rates (though each year the buyers were similarly motivated to get “the lowest rates ever”) and more short sales closing:
NSDCC Detached Sales April 1 – July 31
| Year | # of Sales | Avg. $/sf | REOs | Short Sales | Mortgage Rate 1st Week of June |
| 2010 | |||||
| 2011 | |||||
| 2012 |
Now that we have more confidence in short sales being completed in a timely manor, each listing is getting fair consideration. Which means that virtually all attentions are on price only – they must, because the average pricing actually dipped a couple of ticks.
It is shocking that prices aren’t going up statistically, because it feels like it on the street. Maybe it’s because everyone is fighting over the well-priced homes, and only to a price point within reason – and leaving the rest alone?
Another rare event:
SD Active listings = 6,214
SD Pend & Cont = 9,687
I called it a healthy market when Act to Pend+Cont = 2:1
Now Pend & Cont is 50% higher than actives?
And prices aren’t going up much?
I can’t remember it ever being like this!
I don’t know if it could have enough impact to affect the overall statistics, but lately I’ve seen a lot of short sales close that I thought were way too cheap. Looking at the list/close dates, it appears that the offers were submitted 9-12 months ago and the banks just got around to getting them done–probably not reconsidering the price. I’ve seen a half dozen properties in just the small neighborhoods I watch go for 20% less than I think they could have sold for; all long-pending short sales. That’s one theory.
And, I should mention, they were all what I’d consider inferior or at least lower end properties. So your hypothesis that your perception of the “street” mainly describes the “good properties” could also be correct.
Ya, Jim. Shocking. I agree.
Speaking from a micro-economics view, it looks like the demand curve as a function of price is a step-down function. That means – plenty of demand up to a price, then no demand after that.
From a micro-economic theory standpoint, that’s the only way this could happen.
From a market psychology point of view, it means that people just aren’t willing to pay more than the last guy.
I can attest to buyers being unwilling to pay more than the last guy!
Does it make you wonder, if buyers are so smart, why do we need realtors?
Even though buyers are smarter, prices will go up assuming interest rates stay low. Law of supply and demand.
Perhaps the market is finding an equilibrium here. The low interest rate environment seems to have stopped the downside momentum that seemed to be building last year. By keeping rates low, the Fed may have prevented this market from overshooting to the downside but until rents and salaries start increasing we are probably in a holding pattern.
I agree Pemeliza, I wish more attention was paid to the fact that people have to be able to make their monthly payment, and if salaries don’t increase, I don’t see home prices increasing.