Monday, January 29, 2018 / by Sean Zanganeh
Housing Sales Heat UpBy Lily Leung, Michelle Gilchrist & Andrell Bower for UT San Diego
If you’re talking San Diego County real estate, 2012 was the year of the home sale. It was also an atypical year.
Homebuyers snapped up more than 40,000 properties last year, the highest volume since 2006, when about 44,500 homes were sold, according to numbers from real estate tracker DataQuick.
Old trends were tossed out. Typically, sales rev up in the spring and summer, and hunker down in the later months. But last year, they flamed through the winter holidays as first-time buyers to seasoned investors kept scouting for homes from a limited supply.
Inventory, now at least at a three-year low; record-low mortgage rates; and the inability for many underwater homeowners to sell have pushed home prices up to a 41/2-year high.
“It’s a strange market,” said SDSU real estate professor Michael Lea.
“On one hand, we definitely see an improvement in the market, as prices are moving up and transaction volume is moving up … But we’re also seeing the effects of the bursting of the market. … There still are a lot of people who have negative equity and that has manifested in our lowest levels of inventory.”
CHANGE IN MEDIAN PRICE BY ZIP CODE: SINGLE-FAMILY HOMES, 2012
MORE SCARCITY, BIDDING WARS SEEN
In 2011, homebuyers chased value. That didn’t change in 2012, but it became harder to do as more affordable properties began to grow scarce and multiple-bid wars surfaced.
Buyers concentrated mainly on the entry-level range of $200,000 to $400,000, much like in the past five years. But a change set in last year: Activity in the move-up market, from $400,000 to $800,000, and higher began to tick up. Home sales that were at least $401,000 totaled 15,253 last year, up 24 percent from 2011.
Last year’s total for that section of the market is much lower than the peak of 42,461 set in 2005, but 2012 marked the first double-digit increase in that price range post-recession.
Price increases also can be tied to a major drop in foreclosure resales, which tend to carry a higher discount. Still, even foreclosures on the market aren’t as heavily discounted these days. University of San Diego real estate professor Norm Miller said the average discount for a foreclosure compared to a regular sale in 2012 was 14 percent. In 2008, it was 35 percent.
INVESTORS TAKE BITE OUT OF MARKET
Real estate investors continued to have a strong presence in the local housing market, stimulating housing sales and providing headaches to less-equipped traditional buyers.
The share of all homes that were bought by absentee buyers, mainly investors and second-home buyers, peaked at 30 percent in February 2012 and continued to linger near that level for the rest of 2012.
Those who bought homes for investment reasons during the downturn and have held on to them may be the group to watch this year, said Alan Nevin, economist and a principal at London Group Realty Advisers in San Diego.
They’re key, Nevin said, because if they see prices have risen enough, then they may put their investments on the market. That in turn could help ease the inventory crunch.
SOUTH COUNTY REGAINS SOME OF ITS FOOTING
Home values and sales in South County rose in 2012, suggesting that the hard-hit area could be slowly getting back on its feet.
The median price for a home sold in that region increased 3 percent from 2011 to 2012, while sales went up 11 percent during the same period.
By those two measures, this region is lagging when compared to San Diego County as a whole. However, it’s key to note that the 11 percent rise in sales is the biggest year-over-year increase since 2010, a year marked by frenzied buying because of the glut of foreclosure resales in that area.
The increase in new-home sales and drop in mortgage defaults are perhaps the most encouraging signs for South County. New-home sales rose to 705 in 2012, a nearly 33 percent rise from 2011. Default notices, the first step in foreclosures, have fallen by about a third in areas like Otay Ranch and East Chula Vista, and 47 percent in southeast Chula Vista, the latest DataQuick numbers show.
NORTH COUNTY IS HOT
ZIP codes in the coastal and inland areas in North County outshone other parts of San Diego County, particularly in single-family resales, which make up the bulk of transactions every year.
Seven North County ZIP codes made the Top 10 in home-price increases, when comparing 2012 to 2011. Six ZIP codes made it on the Top 10 list in sales increases.
ZIP codes featured in both lists represent all buyer levels, from entry level ($200,000 range) to upper level, ($2 million-plus) revealing that varying segments of the market are seeing improvement.