Sales Numbers Slightly Down: The number of detached homes put into escrow each month has decreased a bit over the high number of sales in March and April. This slowing in July is in accordance with previous seasonal variation and may also be due to a change in MLS data recording (see below). Here are the numbers from last year and this year:
|
2008 January: February: March: April: May: June: July: August: September: October: November: December: |
1186 1455 1823 1973 2047 1921 2055 2101 2247 1985 1797 1609 |
2009 January: February: March: April: May: June: July: August: September: October: November: December: |
1992 2110 2408 2406 2254 1999 1922 |
View the current Market Velocity chart displaying the above stats
Contingent Short-sales: A new category: In reviewing the above data, we need to take into account that our statistics have changed (starting with June numbers) because our data categorization has changed. We used to just have 3 categories: Active (for sale homes), pending (in escrow homes) and sold homes. We now have a new status category called “contingent” in response to the growing number of short-sales on market. A “contingent” home is a short-sale in which the seller has accepted an offer, but the bank is reviewing the offer and has not approved it. The bank needs to approve any offer on a short-sale before they can open escrow.
Currently, contingent homes appear to make up roughly about 25-35% of our inventory! In the past, some agents left these as active and some put them pending. It is hard for us to fully compare the new data to the old data because of this. The market velocity chart is grouping the active and contingent homes together. This does mean that the new way of keeping data will show more listings as active inventory and less listings (for the time being) as pending.
My interpretation then, is that inventory has actually gone down during the last couple months based on the different way that our data is categorized. i.e., if we were still calculating using the previous methods, we would see less inventory and more pending homes. Although this makes it hard to compare current to previous data, the new category was a necessity and is very useful to those performing a home search.
Government Incentives: This coupon expires when?
1. $8000 federal tax credit to “first-time buyers” (or anyone who hasn’t owned in 3+ years)
2. $10,000 CA state tax credit for purchasing a new home (split up over 3 years)
The federal tax credit is good for any homes closed prior to November 30th. There is talk about extending and modifying this credit, but we have nothing more than hearsay to report on this matter.
Home Loan Rates Still Low: First off, yes there is plenty of financing available to qualified homebuyers. Home loan rates have bounced from upper 4’s to upper 5’s in rather volatile fashion. Currently, we are seeing quotes in the 5 – 5.5% range for the most part. This remains a low-point for home loan rates - it is truly an unprecedented opportunity for home buyers to lock in one of the best rates in history.
How Long Will Rates Stay Low?: The big talk from economists these days is looming inflation (or stagflation) in response to the mass printing of new money as a part of the government stimulus package. With inflation comes higher rates. Economists are split as to when and how high rates will go, but almost all economists agree that we will see a significant rise in the next few years. Some of you will remember home loan rates in the high teens during the late 70’s and 80’s.
View a couple historical charts on Home Loan Rates here:
30-year fixed rates from 1971-2006
Home loan rates and Prime Rate from 1991-2008
Market stratification - luxury vs. lower-end: Luxury prices continue to drop, while low-end homes appear to have hit bottom. (see last quarter’s notes so that we don’t bore you with repetition here).
View a couple examples of this market stratification here:
Mission Hills homes under $800k
Mission Hills homes over $1.2mil
Clairemont homes under $400k
Clairemont homes over $600k
Poway homes under $500k
Poway homes over $1mil
In the lower end of each market, you will see less actives and many more sales in the last 6 months. In the higher end of each market, you will see more actives, and relatively few sales. Also, if you look at a luxury market like Mission Hills as a whole and compare it to Clairemont, you will see that Clairemont is a much hotter market as a whole because prices overall are lower and more affordable.
The best deal in town: Luxury properties: Very simply put, there are more great choices due to higher inventory, room for negotiation when purchasing, and better loan rates (conforming loan limits are up). If you've been thinking of a move-up, now is the time to get a great deal on the home of your dreams.
What should I do?: I don’t know… Buying or selling a home will always depends on your current situation, your goals and your whims, just as much as the market’s economic indicators. I am happy to offer free consultation to you, your friends and family whenever requested. I continue to appreciate referrals received and look forward to helping a friend of yours buy or sell a home soon.
Thank you for reading – here are a couple resources you might find useful:
Search All listed San Diego County Homes for sale - updated daily
Get a current home valuation
I hope you have found this useful and I appreciate any feedback you have for me. I also appreciate your referrals - if you know of anyone thinking of buying or selling real estate in San Diego, I would be happy to work with them.
Warmest regards,
Adam Pascu
Team 73 Degrees
Keller Williams Realty
858-761-1707