Median cost rose $17,000 in county
By Roger Showley, UNION-TRIBUNE STAFF WRITER
Tuesday, March 16, 2010
HIGHLIGHTS BY REGION
Overall median: Up 5.6 percent from January to $322,000
North County Inland: Up 8.4 percent to $347,000
South County: Up 7.9 percent to $279,500
Central San Diego: Up 5.1 percent to $310,000
East County: Up 2.8 percent to $272,500
North County Coastal: No change at $415,000
SOURCE: MDA DataQuick
San Diego County housing prices rebounded last month after dropping unexpectedly in January, but experts said they are waiting for spring sales to tell them whether the market is improving or just treading water.
DataQuick analyst Andrew LePage said the increase was not caused by a sudden increase in appreciation but by a change in the market mix. The homes that closed escrow in February were in all price ranges, he said, instead of mostly low-cost distressed properties.
“What did sell in January tended to be more concentrated in (homes for) the first-time buyers and investors,” LePage said, which caused the median to fall from $330,000 in December to $305,000 in January.
But if February saw a more normal distribution of sales, it also was the third straight month that sales of foreclosed homes rose. In February, foreclosures represented 38.8 percent of resales, compared with 38.2 percent in January and 35.8 percent in December.
“We’re still playing cleanup with a lot of properties that entered the foreclosure process last year,” LePage said.
Robert Brown, an economics professor at California State University San Marcos, said he has been using the word “stability” to describe the local housing market, because prices seemed to have bottomed out last year and have risen gradually in different neighborhoods. The county’s median peaked at $517,500 in November 2005 and fell to a low of $280,000 in January 2009. It is now 15 percent above the bottom and 37.8 percent below the peak.
“In terms of having a big rebound, I don’t foresee that, but we have to wait a couple of months before we see what we’re talking about,” Brown said.
He said there are too many unknowns with the economy to predict the rest of the year, citing a possible rise in interest rates and the health care legislation pending in Congress.
And then there’s the “shadow inventory” of homes that banks have repossessed but not yet listed for sale, as well those that could be foreclosed if owners cannot get loans modified or short-sales approved. A short-sale is a home that is sold for less than its outstanding mortgage balance.
“We’re not really going to have a stabilized market until that inventory runs through the system,” Brown said.
Trans-Union, a credit and information management company, reported that 10 percent of San Diego mortgages were at least two months delinquent at the end of last year — a figure that in the past has typically pointed to foreclosure.
Brown agreed that January and February are not good bellwethers for predicting the year’s housing market.
“I think it’s going to take until early summer at least, not just March, to really get an idea of what’s going to be happening,” Brown said.
With the balancing of the market mix in February came more sales of higher-priced, move-up homes whose owners can no longer afford them, particularly in some coastal neighborhoods.
“Clearly, there are more people in trouble, even though it is nowhere near the concentration of what we have seen inland,” LePage said.
About 45 percent of all sales involve short-sales, which would mean that more than 80 percent of the county’s sales involve distressed properties. He considers that an improvement over last year, when he estimates that 90 percent of sales were distressed properties.
Much of the activity last year was driven by low-cost foreclosures and federal tax incentives, originally $8,000 for first-time buyers and then expanded to $4,000 for move-up buyers. But to qualify, a buyer must be in escrow by March 31. The state also had a $100 million tax incentive program last year. Gov. Arnold Schwarzenegger called yesterday for new tax credits, but the Legislature has not acted.
Another hallmark of last year was competitive bidding for starter homes, with investors often offering more than prospective owner-occupants. Now, Mendoza’s colleague Ben Evers said move-up buyers are beginning to make multiple offers on homes in the $400,000 to $600,000 range, a sign that demand exceeds supply.
“It’s always dependent on the neighborhood and condition of the home, but homes in the slightly higher, next rung up seem to be getting attention,” he said.
February sales totaled 2,465, slightly lower than a year ago and about 400 less than the five-year average for the month, DataQuick said. Analysts attributed the year-over-year drop to a lower inventory of homes for sale.
The San Diego Association of Realtors said yesterday’s inventory of active and pending listings stood at 14,084, down about 700 from this time last year.
“If employment picks up and unemployment figures improve, there’ll be an upward direction in home buying,” he said.
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