Last Updated
September 13, 2004
San Diego Housing Market Cools Down
During the past three months,
home prices throughout San Diego have stabilized while inventory has grown as
the region shifts gears from the sizzling buyer’s market of spring. Whether this
becomes a seller’s market or is just the market taking a breather remains to be
seen. However, industry experts agree
that the demand for housing and the relatively low interest rates will keep the
home buying market from collapsing.
Nonetheless, the San Diego
region now has the least affordable housing in California, according to a
report released last week by the California Association of Realtors (C.A.R.).
The percentage of households that can afford to purchase a median-priced home
in San Diego, which was $582,490 in July, was 10 percent. This is followed by
the Orange County and Monterey regions at 11 percent, while statewide the
percentage stood at 18 in July, a nine percent decrease over the same period a
year ago.
“A lot of people say there is
no housing bubble, and I sort of share that view,” says Keitaro Matsuda, senior
economist at Union Bank of California. “But there are markets that are more
overheated than others. If I had to pick, San Diego would be one where some
sort of correction is likely to happen.”
Matsuda and other experts do
not foresee the local housing market collapsing, but rather entering a slow
deflationary period in which prices flatten until economic fundamentals, such
as household incomes, catch up with the recent rapid price gains. “It probably won’t warrant double-digit
increases going forward,” he continues. “It probably will do better than
inflation, so it will still be a pretty good investment.”
Raphael Bostic, an economist
with the Lusk Center for Real Estate at the University of Southern California,
notes that, “We have been in a production deficit for housing for five or six
years now.” He believes that imbalance is likely to continue and demand is
likely to stay strong.
Luxury Home Values Set Record in San
Diego
Luxury home values in San
Diego set new highs in the second quarter of 2004, growing by 18.8 percent over
the past 12 months, according to the Prestige Home Index by the First Republic
Bank released recently. The index found
that San Diego Values also increased 5.6 percent from the first quarter of
2004. San Diego luxury home values averaged $1.73 million.
Comparatively, luxury home
values in the Bay area climbed 16.4 percent year over year to $2.54 million,
and Los Angeles values rose 17.5 percent in the same period to $1.72 million.
“Luxury home values were
exceptionally strong in the second quarter of 2004,” said Katherine
August-deWilde, bank chief operating officer. “The strengthening economy and
continued strong demand contributed to the records set in all three urban
California markets. In all areas of California, there is a rising level of
inventory that may slow the pace of appreciation, and we would express a note
of caution that such continued appreciation is very unlikely.”
Looking at the highest end of
the market, particularly in Rancho Santa Fe, one of the nation’s most expensive
areas, David Cabot of Prudential California Realty noted it always takes longer
to sell multi-million-dollar homes because there are fewer customers in the $5
million and up category. Sales in the Ranch have remained steady throughout the
year.
Mixed Signals For Local Economy
Falling unemployment rates
and rising consumer confidence signal continued strength in the San Diego
economy, according to a report released recently by the Burnham-Moores Center
for Real Estate at the University of San Diego. According to the study, the
index of leading economic indicators rose 0.2 percent in June, marking a full
year of unbroken growth. But June’s growth rate was the smallest monthly change
since last August.
The North San Diego County Resale Report
Single Family Homes Sold In 2004
|
Area
|
Zip Code
|
2003 Average
|
2004 Average
(thru August)
|
|
|
|
|
|
|
Bonsall
|
92003
|
$659,479
|
$744,576
|
|
Carlsbad
|
92008
|
548,650
|
738,605
|
|
Carlsbad
|
92009
|
646,604
|
833,870
|
|
Carmel Valley
|
92130
|
885,464
|
1,091,053
|
|
Del Mar
|
92014
|
1,284.324
|
1,647,783
|
|
Encinitas
|
92007
|
820,758
|
1,020,797
|
|
Encinitas
|
92024
|
781,745
|
991,913
|
|
Escondido
|
92025
|
421,434
|
534,197
|
|
Escondido
|
92026
|
392,843
|
500,856
|
|
Escondido
|
92027
|
355.395
|
456,413
|
|
Escondido
|
92029
|
512,384
|
669,275
|
|
Fallbrook
|
92028
|
466,520
|
605,242
|
|
La Jolla
|
92037
|
1,448,033
|
1,799,555
|
|
Oceanside
|
92054
|
425,817
|
526,303
|
|
Oceanside
|
92056
|
390,070
|
489,075
|
|
Oceanside
|
92057
|
365,276
|
473,789
|
|
Pauma Valley
|
92061
|
532,169
|
666,436
|
|
Rancho Bernardo
|
92127
|
609,179
|
827,637
|
|
Rancho Bernardo
|
92128
|
493,719
|
600,492
|
|
|
|
|
|
|
Rancho Santa Fe
|
92067
|
2,077,215
|
2,436,465
|
|
|
|
|
|
|
San Marcos
|
92069
|
414,475
|
531,967
|
|
San Marcos
|
92078
|
466,215
|
609,056
|
|
Solana Beach
|
92075
|
903,066
|
1,268,924
|
|
Valley Center
|
92082
|
495,237
|
621,011
|
|
Vista
|
92083
|
359,740
|
434,676
|
|
Vista
|
92084
|
433,399
|
557,221
|
Source: Multiple
Listing Service
