Scott Elwell

We all know that until the inventory of short sales and foreclosures are sold and gone, hopefully never to be seen again in such abundant amounts (we will all learn from this, right?), home values will continue to suffer in San Diego neighborhoods like East Village San Diego with these properties selling at 15-20% below market value. Apparently a "normal" level of distressed homes inventory is 5% of all listings or below, and once we approach that figure the market should become a truer, even buyer-seller market once again. The cure for this may be in hoping for economic growth- ie jobs- in the San Diego market. The stock market has done its part lately, experiencing highest highs since 2008, but who wants to make a home purchase without job security? Don't forget about the dreaded "shadow inventory" of distressed homes that have not yet come on the market- they're tied up in banks'red tape right now- but they will come out this year for sure. Government programs supposedly helping struggling, underwater homeowners haven't really had a strong effect. However, September, 2011 marked the 12th staright month in which foreclosure activity decreased over a year-to-year basis. Europe's debt crisis surely is a major concern as well. Its crisis has helped to keep interest rates low, but it has also taken away a major portion of the buyers' market domestically. Finally, let's look at lenders' contributions to the state we're in. Credit standards and down payment requirements have been incresed since the big real estate market plunge back in 2007. Young, first-time buyers are continually being told that this is the best time to purchase real estate in years. Then they try to figure out how they are going to come up with a minimum 20% down payment up front. Then they try to get prequalified for a loan and find out they should have made those cell phone payments on time when they were 18. It's a tough time to buy or sell right now in San Diego real estate.

Several new California laws went into effect on January 1st and many people did not seem to get the memo... So here's an abbreviated synopsis:

*California's smoking laws just got tighter- landlords may now prohibit smoking in rental properties.

*There will be no more self-service alcohol register check-outs at retail stores- there now must be face-to-face alcohol sales.

*There will be no more sales, importation, or production of caffeinated beer beverages in California.

There is a new car booster seat law in effect- kids under 8 years old, or not yet 4 feet nine inches tall, must be securely fastened in the back seat of a car.

*The possession, trade or sale of shark fins is now illegal here.

*Anyone with a misdemeanor or felony animal-abuse conviction is prohibited from possessing animals for 5-10 years after the crime.

*Owners of multi-family housing with five or more units must now provide paper, plastic, bottle and can recycling services for tenants.

*School textbooks and social studies classes must include the historic accomplishments of gay, lesbian, bisexual and transgender individuals and groups.

*Credit checks on employees from prospective employers are now restricted.

*The seat belt law now requires that the lap portion of a seat belt must cross the hips and upper thighs of an adult and the shoulder section must cross the chest in front of the occupant.

*The open carry of unloaded handguns is now (mostly) illegal.

The above is only a portion of the new laws that have gone into effect. If I had my way, here are just a few laws I would put into effect in California, or specifically San Diego:

*I would love to ban pedicabs permanently, but since that is restarint of trade, how 'bout prohibiting them from carrying small children down busy streets in the Downtown area where cars routinely whiz past them?

*How'bout prohibiting smoking right outside the doors of restaurants and bars. I know there's some sort of a distance rule, but no one follows it.

*Littering in this beautiful city should call for a jail sentence. I mean it.

*Homeless citizens who refuse shelter when it is available should be arrested and fined.

*Club and restaurant owners should be more heavily fined or have licenses suspended for over-serving patrons.

Well, I have gotten that off my chest... If you would like to live in San Diego, please click East Village San Diego Homes For Sale

2012 is going to be a better year to be living in San Diego and there is hope that we will have lots to look forward to in real estate in San Diego. The market in San Diego and specifically Downtown San Diego seems to have bottomed out and a new year brings hope and resolutions to us all. 2012 should be an improved market, as prices should begin to stabilize, inventory should grow, interest rates should remain near historically low levels, and with a presidential election coming later this year, there shouldn't be any radical, earth shattering legislation by the existing leaders that would further stymie the market's rebound. We all know that in 2011, people could read countless articles online or in the newpaper or watch any news program on television and come away feeling that the real estate world had come to an end, Chicken Little-style. Even though history has told us countless times again and again that the market is cyclical, people still choose to believe that a "bad" market means "do nothing, run away and hide". 2011 marked perhaps the best year in the last fifty years to purchase property in San Diego. Interest rates in some cases fell below 4%. Inventory was not high but adaquate. Prices remained low. Loan restrictions eased a bit after the 2008-2010 tight phase. Many potential clients I spoke with (especially young, first-time buyers), however, expressed very little disappointment about "missing out" on such a great opportunity. in most cases there seemed to be a level of apathy or hopelessness, and that is troubling. Many couldn't afford a down payment (especially at 20%). Many had severe credit issues. Many expressed a fear of job status. Many San Diegans just like renting in San Diego and the idea that they can just up and move without the "hassle" of home buying and selling. More than a dozen of these folks flat out stated to me "No one is buying real estate right now". Well, that is simply not true. The San Diego market is always active. Living in San Diego, however, is no different than living in other sectors of the country. It is consumer sentiment, or simply put, "What the Joneses do I'll do" philosophy always prevails. If a consumer is battered with all of this "bad market" talk, he will surely tell everyone around him the same sentiment and the solution seems to be to do nothing. Why get into the San Diego market when it's "bad". I tell potential clients looking for real estate in San Diego, whether it's a highrise in the Marina District, a condo in East Village or a home in South Mission Hills, that purchasing today would be an incredible investment in the future. Yes, we Realtors have our little disclaimers that say that we can't guarantee financial gains, etc. , but history shows that the market always bouces back. Right now San Diego homeowners are probably sensing a trip back in time to say, 2003 or so when the market was quite like it is today, in a recovery, hopeful stage. He who purchased property here in 2003 realized amazing gains in the next four years or so. However, as it is with human nature, people will not act until the media has assured everyone that the market has improved. Then everyone will again try to keep up with their neighbors and buy homes becuse it's okay now to do it and guess what? Prices rise and we're in a whole new ballgame- cyclically. So think outside the media box. Make smart decisions not driven by what everyone else is doing. Enjoy 2012 here in San Diego, America's Finest City.

Courtesy of Sandicor, November's statistics are in for real estate activity in South Mission Hills, San Diego CA. Mission Hills and South Mission Hills are beautiful neighborhoods just north of the Downtown San Diego area that feature many period styles of homes like early 1900's Craftsman, Spanish Revival, Colonial, etc. It is one of San Diego's most exclusive neighborhoods and a wonderful place to raise a family with award-winning schools and strong community ties. For the purpose of statistics, South Mission Hills is considered that area south of Washington, bordering Hillcrest, Bankers Hill and Middletown.

Currently there are 17 active detached homes for sale in South Mission Hills San Diego. They range in price from $629,900 to $1,850,000. They average 3 beds, 3 baths, 2,661 square feet and $1,027.12 list price, or $400.60 per square foot. They average 97 days on the market. The median numbers are 4 beds, 3 baths, 2,420 square feet, $923,500 list price or $400.12 per square foot, and 76 days on the market. Non-detached homes (condos, townhomes, etc.) are fewer to be found. There are only 7 on the market here at this point. They average 2 beds, 2 baths, 1,129 SF and $353,74 list price, or $317 per SF, and 73 days on the market.

There are 7 detached homes in escrow at the moment, averaging 3 beds, 2 baths, 2,110 square feet, a list price of $675,43 ande 24 days on the market. There are only 3 attached units in escrow, averaging 2 beds, 2 baths, abou 1200 square feet and a list price of about $300,000.

There were only 2 detached homes sold in November in South Mission Hills, as activity was slow. One was a small office conversion at $265,000 and the other a more traditional 3 bed, 2 bath 1,201 square foot $600,000 sale. only one condo sold as well in November, a tiny 1 bed, 1 bath, 597 square foot $130,000 sale.

This amount of low inventory and low activity is most likely due to several factors: first, homeowners in this area are generally long-time owners and plan to live their whole lives in these beautiful homes and in this wonderful neighborhood. It is also a very affluent neighborhood and most savvy homeowners do not wish to sell now until prices return to 2004-2005 levels. Finally, as in the rest of the country loan limits on "jumbo" loans have made it difficult for "move up" buyers to purchase these properties. This is an area that generally will see very few if any short sales and foreclosures, so prices in 2012 should increase a couple of % or more, but will that mean sellers will start to sell here ? Time will tell if we'll see more houses for sale in South Mission Hills San diego in 2012.

Okay- if I am asked once, I'm asked a thousand times by friends, acquaintances, teammates, my dentist, dry cleaner, doctor, elevator-sharer and mainly by clients who own or are looking to buy condos and highrises in the Marina District San Diego, CA: "How's the Market?" How do you answer this? I certainly don't tell anyone to read the local paper- the San Diego Union Tribune, which has used bogus or irrelevant statistics to push forth a "Chicken Little Sky is Falling "response. So really, it depends on your situation. In San Diego, no matter how "bad" the market is supposed to be, still 100-200 homes are selling a day. It's not like time has stood still, folks. Transactions are happening. So it depends where you stand on the realities of the market when you ask this question. Consider the big picture realities of both the national and San Diego real estate market, courtesy of NAR (National Assoc. of Realtors) Chief Economist Lawrence Yun in November in Anaheim:

1) 2011 is the best year since before 1970 for home affordability, with nearly 70% of all US households able to buy a home. So why has there been no real pick-up in home sales? Consumer confidence at 50- year lows, that's why.

2) Home prices nationally have stabilized for two years (and locally not much different), yet everyone still believes that prices have just continued to drop. Why?

3) There is a forty year low in new home building inventory nationally and here in San Diego.

4) In 2010, 50% of all homes bought were first-timers. That dropped to 37% in 2011 (same as 2006). Strange, since affordability is at an all-time high, isn't it?

5) In 2010, the median age of a buyer was 39 and had a gross household income of $72,200. In 2011, it's 43 and $80,900. It seems many are still renting or living at home longer.

6) Fun Facts- from 1981-2011 in terms of price index, the CPI increased 160%, the rent index +200%, the food price index +150%, gasoline index +197%, college tuition up 693% (ouch), medical care up 410%. So what about the monthly mortgage payment on a median priced home? Up ONLY 17%!!

7)Since 2000, check out the following returns on your investment dollar to date: DOW +6.7% gain, S & P -12% loss, NASDAQ -30% loss. Real estate? a 43% GAIN!

8) Home prices should increase by 2% in 2012, but mortgage rates will edge up to 4.5 %.

So it's definitely a strange market, but if you atre a buyer it is the "perfect storm" for buying property in San Diego and the Marina District specifically. Historically low interest rates, good inventory and bottom prices. Remember, if you are one of those who wants to wait because you think prices will drop further, remember that a 1/2 point increase in mortgage rates will negate that. So it is imperative not to base your buying on price, but rather on COST.