September proves home prices are staying strong.
We recently came across a great article from the Union Tribune and thought it would be helpful to share with our readers. Home prices are staying strong in the real estate market. Check it out:
September offers more evidence that home prices are staying strong after the popular buying seasons of spring and summer, based on Friday’s market report from real estate tracker DataQuick.
The median price for all homes sold in the San Diego County market in September was $350,000, up 1.4 percent from August and up 11.1 percent from the same month a year ago. We’ve been hovering at or around a four-year high for the last three straight months, a result of increasing consumer demand and a lower-than-normal supply. Home prices have either stayed flat or gone up during the last six months.
The county recorded a total of 3,214 home sales, including single-family resales, condos and new homes. That’s a 19.3 percent drop from August.
However, it’s important to note that August was the busiest month for San Diego County homebuying since 2006. The monthly sales average in the county this year to date is 3,348 – up more than 12 percent from the same time period last year. Another reason for the dramatic month-to-month sales drop: there were four fewer business days in August.
DataQuick analysts point to record-low mortgage rates and a boost in consumer confidence as reasons for the increase in prices not only in San Diego County but also throughout Southern California.
Another key factor is that fewer foreclosures are being resold into the market and those tend to be priced lower than traditional homes. Foreclosures made up 13.3 percent of total resales, the lowest percentage for any month since July 2007, when it was 11.6 percent.
“Assuming this year’s modest upward trend in pricing holds,” said DataQuick president John Walsh in Friday’s report, “we’ll eventually see the market begin to re-balance with more supply, though that could take many months. More and more potential move-up buyers who do have equity will be thinking about timing their next purchase to maximize the advantage of super-low rates and relatively low home prices. As more potential sellers get off the fence, or no longer owe more than their homes are worth, we’ll see the inventory of homes for sale rise. That’s going to limit price appreciation.”
Lower-than-normal inventory continues to be a challenge for buyers but is a positive for sellers trying to get the best price for their home.
The number of active listings in the county featured on the Multiple Listing Service has fallen for 15 straight weeks. Right now, there are roughly 5,300 available listings, the lowest number in at least three years and three months, based on data from the San Diego Association of Realtors. The current listing supply is half of what we saw the same time a year ago.
The result of limited supply and increased demand? Bidding wars.
Joseph Toro, a retired manager at IBM, engaged in a few of them during his hunt for a home in San Diego County.
“Bidding wars are becoming unreal,” Toro said. “We put in eight to nine bids. We’d get bumped off by investors or pure cash deals.”
The share of homebuyers paying with cash is 31.4 percent, down from 32.9 percent in August and up from 27.1 percent a year ago.
Article on home prices can be found at: http://www.utsandiego.com/news/2012/oct/12/san-diego-home-prices-hold-4-year-high/
