San Diego Real Estate & Homes for Sale :: Robert T. Boyer, Ph.D.

The stats are in for September. It would seem that for detached homes the sales for last month are only slightly below the median. It is reassuring that we have bounced back from the premature August dip. I have to wonder what we might have seen if San Diego foreclosures had not been so stymied by the moratorium.

The story is slightly better for single family atached homes.

As ONE indicator of market health, things would seem to be stable. However, we will have to wait to discover if the first time homebuyer credit is extended and whether or not that has any net effect on the rate of sales. Given that 350,000 (about 20%) of all sales have been credited to the tax credit, it seems likely we could take a nosedive if the credit is not extended. As it is, if it is extended, we may still take a dip as the hard deadline to beat will have been eliminated.

If you are looking for a property that is a good investment (or can be once you are done living there), check any of the following three links:

If your are looking for other San Diego Homes for Sale, you can find them here:

I stumbled across the following today and thought it was worth echoing in the rain.

Recent Changes in Real Estate Recordings for San Diego County
by Jeffrey on September 28, 2009

"The San Diego Recorders Office has recently made some changes in the way real estate recordings are done. Previously, only San Diego County and Orange County allowed "special recordings" in Southern California. Due to these economic times and less staffing, the change is a more efficient way to do closings."

The rest of the article is at: http://www.sandiegolifestyle.info/2009/09/san-diego-real-estate-recordings/

I thought this important to repeat because I had a recent transaction with an out of area agent and their out of area escrow company. I had made the essence of the changes - that there is only one recording per day now - of clear and yet they messed up not just one day but several. (Maybe it had nothing to do with the single recording, just a bad escrow company.)

The only thing better for an economic recovery than an infusion of government subsidy is a ton of new jobs, or in this case six-tons. According to a recent article, MGM Mirage & and Infinity World Development Corp, a subsidiary of Dubai World, will be opening CityCenter this December on the Las Vegas Strip. They expect to fill 12,000 permanent positions.

Normally, each "new job" has a multiplying factor - anywhere from 1.5 to 5 - to account for all the ancillary support jobs that are needed to support the new workers. Let's be conservative and use 1.5 as the factor. So, we're are looking as something like 18,000 jobs. On the one hand, that's great! On the other hand, that's only about 2% of the local working population when the area currently is suffering 13.4% unemployment. And, it is unclear how many jobs are to be canibalized.

Is this enough to stop the downward spiral, initiate a virtuous cycle, and turnaround the housing situation in Las Vegas? The answer to that question lies in the future. However, the reason to bring this up now is that you don't know whether or not you've reached bottom until after the fact.

Currently there are many Las Vegas investment properties with strong positive cashflow - properties selling from 50-90 thousand while asking rents are $1100-1300 / mo. and above. This is a great cashflow play (even considering vacancies), and we can let appreciation and inflation take care of itself. Currently FinestExpert.com shows hundreds of Las Vegas homes for sale with a FE-Score of 850+ and a Cash-on-Cash Return (CCR) of over 15%. And of course, if properties are good for a landlord to own, then in the rent vs buy equation, they are good for the 1st time homebuyer as well.

A few hours ago, I wrote San Diego Single Family Detached Homes - Sales Rate Drops Precipitiously in August 2009. We just saw about a 20.6% decline in sales from July to August 2009. But, I included the speculation that the decline is less a sign of disinterest but rather lack of inventory.

In the chart below, we see that for single family detached homes we have just about 1-month of inventory for prices up to $350K, and less than 3-months inventory for up to $600,000. For single family attached homes, we have about 1.5 months of inventory for prices up to $300K and less than 3-months for up to $450K.

You may want to compare this chart with last month San Diego Real Estate - Months of Inventory - Market Report - July 2009 when our sales rates were higher, but so was our inventory. The most noticeable item is the continued reduction in inventory across all price ranges.

At the "normal" end of the market, it is definitely a sellers market.

The June 15th foreclosure moratorium of 90 days will expire in 3 days. Let's see how much inventory the banks start putting on the market.

A 20.6% decline in the rate of sales between July and August 2009 for Single Family Detached Homes in San Diego is about as sharp a decline as we may ever see. As one measure of the health of our housing industry, what does this information tell us?

We can see that a July to August decline is fairly typical, but this drop is extreme.

From some other stats, our total months of inventory is 2.8 months, but only 1.5 months up to $500,000.

At this point, I would offer that the decline is sales is linked more with the low inventory than anything else. The low inventory is tied most tightly with the foreclosure moratoriums (which are due to expire in a few days).

Knowing how many offers are occuring on nearly every home placed on the market, I believe if we have a reasonable release of foreclosures (say no more than 5,000 - to bring us to 4.5 months inventory) we will have swelling sales this fall / winter. (I believe also that I make that statement without Pollyanna's rose-colored glasses.)