San Diego Real Estate Blog

December 2009 Summary Report

Single-Family Detached Homes

• The median price for all homes in North San Diego County – single-family detached and single-family attached – remained at $370,000 in December 2009.1

• The median-priced single-family detached (SFD) home in North San Diego County decreased 0.6 percent to $436,000 in December 2009 from $436,250 in November 2009. The SFD median price in Non-North County zip codes rose 0.89 percent to $353,000 in December 2009 from $349,900 in November 2009.

• Year-over median SFD price in North San Diego County increased 16.19 percent from $375,250 in December 2008, continuing a trend of rising year-over prices from August 2009 following 22 months of price declines. Year-over median price rose 5.37 percent in Non-North County from $335,000 in November 2008, the third straight month of year-over increases.

• The countywide median SFD price increased 1.6 percent to $385,000 in December 2009 from $378,950 in November 2009, and increased ten percent year-over from December 2008 – this was the fourth month of year-over price increases county-wide.

• The overall median price for single-family detached homes was $414,000 in 2009, compared to $454,000 in 2008.

Single-Family Attached Home Prices

• North San Diego County median-priced single-family attached (SFA) home fell 5.45 percent to $238,750 in December 2009 from $252,500 in November 2009. The Non-North San Diego County SFA home median price declined 4.76 percent to $200,000 in December 2009 from $210,000 in November 2009.1

• North San Diego County SFA median prices increased 13.69 percent year-over from $210,000 in December 2008 continuing a five-month trend of year-over price increases, the last three of which increased over 10 percent. This trend counters 24 months of year-over declines.

• Non-North County median SFA prices rose 2.56 percent year-over from $195,000 in December 2008.

• The county-wide SFA home median price fell 4.23 percent to $215,000 in December 2009 from $224,500 in November 2009, and increased year-over 7.5 percent from December 2008.

• The median number of days-on-market for North County SFA homes sold remained at 33 in December 2009. The average number of days-on-market declined to 65 in December 2009 from 67 in November 2009.2

Lawerance Yun, NAR Chief economist, projects an additional 900,000 first-time buyers will qualify for the extended tax credit, in addition to about 2 million who have already purchased; 1.5 million repeat buyers also are expected to benefit from the credit.

“Many trade-up buyers, who have historically timed their purchase based on school-year considerations, will have to accelerate their buying plans if they need the tax credit to make a trade,” Yun said. Repeat buyers do not have to sell their existing home to qualify for the credit, but they must occupy the home they buy as their primary residence.

Yun added that mortgage interest rates cannot remain at rock-bottom levels for a sustained period and will likely inch higher in 2010. But the tax credit impact in the first half of the year and expected job-growth impact in the second half will support home buying activity and absorb enough inventory to bring a rough balance between buyers and sellers. Home prices are expected to stabilize or even modestly rise as a result in 2010.

Home prices in 45 of the largest housing markets are expected to fall another 4.2 percent before they hit bottom in March, according to First American CoreLogic’s LoanPerformance Home Price Index.

By October 2010, prices are expected to be heading upward again by about 1 percent compared to 2009.

The report warned that this progress could be jeopardized by an increasingly large “shadow inventory” of homes owned by banks but not yet on the market. The problem is particularly acute in Michigan and Ohio cities, the report said. It projected a 12.7 percent further decline in values in Detroit, an 11.4 percent decline in most of the rest of southeast Michigan, and a 6.3 percent fall in Cleveland.

The report expects the strongest recoveries next year in California cities. These include:

1. San Francisco, up 5.7 percent

2. Los Angeles, 5 percent

3. San Diego, 4.7 percent

4. Sacramento, 4.6 percent

Source: Inman News (12/21/2009)

On a national level, eight out of the top 10 projects in terms of costs recouped were exterior replacement projects that cost less than $14,000. Certain types of door and siding replacements, as well as wood deck additions all returned more than 80 percent of project costs upon resale. A steel entry door replacement – a new addition to this year’s list – recouped 128.9 percent of costs, followed by upscale fiber-cement sliding replacements at 83.6 percent. Wood deck additions recouped 80.6 percent of costs.

On a national level, the project with the biggest improvement from 2008 was the attic bedroom addition, recouping 83.1 percent of remodeling costs compared to 73.8 percent in 2008. The only other interior project that landed in the top 10 was a minor kitchen remodel with 78.3 percent costs recouped.

Other exterior projects in the top 10 include midrange vinyl and upscale foam-backed vinyl sliding replacements, which returned more than 79 percent of costs. In addition, several types of window replacements – midrange wood, midrange vinyl, and upscale vinyl – all returned more than 76 percent of costs upon sale.

Similar to last year’s report, the least profitable remodeling projects in terms of resale value were home office remodels and sunroom additions, returning only 48.1 percent and 50.7 percent of project costs.

Regionally, cities in the Pacific states of Alaska, California, Hawaii, Oregon and Washington once again outperformed the rest of the nation in terms of remodeling costs recouped upon resale.

Source: NAR

November 2009 Data

1. The median price for all North County home sales – attached and detached – decreased 1.35% in November 2009 from October 2009, to $370,000.

a. Detached homes in North County rose 1.45 percent, from October 2009 to November 2009, from $430,000 to $436,250.

i. Detached home prices OUTSIDE North County decreased 1.4% from October 2009 to November 2009, from $355,000 to $349,900.

ii. November 2009 median single-family detached homes in North San Diego County increased 21.86%, from $358,000 in November 2008. The median price OUTSIDE North County for single-family homes rose 7.66 percent from the $325,000 a year ago.

iii. The countywide median price of homes sold decreased from $380,000 in October 2009 to $378,950 in November 2009 and was up 11.62% from the November 2008 number.

b. Attached home prices in North County increased during November 2009 by 5.54%, from $239,250 a month earlier to $252,500.

i. Non-North County attached home prices increased 2.44% in November 2009; from $205,000 to $210,000.

ii. North County attached homes increased 40.28% from $180,000 a year ago.

c. Median days-on-market for single-family detached homes in North County remained at 35 days in November 2009. The number of North County single-family homes sold fell 18.13% last month, from 772 to 632. There was a year-to-year increase of 9.15% for home sales in November 2009 compared to November 2008.

1. For several months, the California and local housing markets have been experiencing a sales rebound as a result of low interest rates, a continuing supply of distressed properties coming to market, and a continuing reduction in the fear factor on the part of prospective homebuyers.

Driven by the home buyer tax credit, existing-home sales showed another big gain in October with a strong uptrend established over the past seven months, according to the NATIONAL ASSOCIATION OF REALTORS®. At the same time, inventories have continued to decline.

Existing-home sales—including single-family, townhomes, condominiums and co-ops—surged 10.1 percent to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.

1. The median price for all North County home sales – attached and detached – decreased 1.33% in October 2009 from September 2009, to $375,000.

a. Detached homes in North County decreased 5.91 percent, from September 2009 to October 2009, from $457,000 to $430,000.

i. Detached home prices OUTSIDE North County increased 1.44% from September 2009 to October 2009, from $349,950 to $355,000.

ii. October 2009 median single-family detached homes in North San Diego County increased 5.39%, from $408,000 in October 2008. The median price OUTSIDE North County for single- family homes rose 2.9 percent from the $345,000 a year ago.

iii. The countywide median price of homes sold decreased from $385,000 in September 2009 to $380,000 in October 2009 and was up 4.11% from the October 2008 number.

b. Attached home prices in North County increased during October 2009 by 1.81%, from $235,000 a month earlier to $239,250.

i. Non-North County attached home prices increased 7.89% in October 2009; from $190,000 to $205,000.

ii. North County attached homes increased 15.02% from $208,000 a year ago.

c. Median days-on-market for single-family detached homes in North County increased from 30 days in September 2009 to 35 days in October 2009. The number of North County single-family homes sold increased 0.26% last month, from 770 to 772. There was a year-to-year decrease of 4.93% for home sales in October 2009 compared to October 2008.

2.

The residential real estate market has swung from the seller’s market of three years ago when home prices were increasing as much as 20 to 30 percent per year to the buyer’s market today where prices have decreased and there’s an abundant inventory of homes from which to choose. That’s good news for those looking to buy a home.

a. Interest rates continue at record lows, at least for the short-term future.

The current condition of the housing market needs to be kept in historical perspective. Home

1 values rose 88 percent on a national average – higher in California – over the past decade.

4. Sales continue to be hampered by problems in real estate finance. Both tighter underwriting standards and the ongoing effects of the credit/liquidity crunch continue to limit sales.

a. Buyers with secured financing, or all cash are not hampered by the constraints of the real estate financing market.

2 In fact, several North County brokers and agents have experienced significant increases in activity, working with well-qualified buyers who recognize optimum buying conditions.

Expected to contribute approximately $22 billion to the economy, Congress overwhelmingly passed a bipartisan measure this week extending the $8,000 home buyer tax credit to April 30, 2010. The legislation, which is part of a larger bill that also extends unemployment benefits, was signed into law by President Obama today. More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years. Income limits for eligible home buyers were also expanded to $125,000 for single buyers and $225,000 for couples, up from $75,000 for individuals and $150,000 for couples. Qualifying home prices are capped at $800,000.

NAR’s Government Affairs Division has compiled facts on the changes made to the current tax credit. NAR members sent more than 500,000 letters to leaders in Congress and made nearly 13,000 telephone calls to Senate offices last weekend to encourage support. So far this year, REALTORS® have spent nearly $14 million lobbying Congress, according to federal campaign finance records compiled by the Center for Responsive Politics.

Sen. Johnny Isakson, a Georgia Republican and a former member of NAR, was key in extending the credit, as well as pushing it through initially. Other prominent boosters include the National Association of Homebuilders and the Mortgage Bankers Association.

Sources: NAR and The Associated Press, Julie Hirschfeld Davis (11/06/2009)

Young people just starting to invest and buying their first homes are potentially the winners in this recession.

First-time homebuyers, most between the ages of 25 and 45, accounted for about 45 percent of home sales from January through July 2009, according to the National Association of REALTORS®

“This is a historic time,” says George Jaramillo, a 35-year-old business analyst in Atlanta, who recently bought three homes, two of them foreclosures. “It’s a great opportunity to make some great gains in the future.”

A study by investment company T. Rowe Price points out that investing when prices are low can result in amazing gains. For instance, between 1970 and 1990, the annualized rate of return for the S&P 500 was 11.5 percent.

“We need to be shouting from the rooftops that this is not the time to get out of the market if you’re young,” says Christine Fahlund, a senior financial planner with T. Rowe Price. “This is the time to be in the market.”