Have Housing Prices in San Diego Hit Bottom?
In the past month, San Diego County witnessed the most home sales for any given March in six years; home prices increased 5.1% to $320,500 from Februrary. A home price index report asserts that San Diego was one of the three metropolitan areas that experienced positive returns on a month-to-month basis. A panel of qualified bankers, brokers, realtors and economists weigh in on whether the index report indicates a bottoming out of San Diego County’s housing market.
Some professionals say that, technically, housing prices are not about to hit rock bottom. This is because the actual “bottoming out” for home prices in San Diego occurred in 2011’s fourth quarter. The recent statistics for March indicate an improving housing market. Real estate agencies are selling more homes and the area, as home prices are gradually increasing, which is a sign of economic advancement in the housing market—even though the prices of San Diego homes was four percent higher a year ago.
Also, the spring season meant lower mortgage interest rates; this could be good news for San Diego residents, as only about 45% of San Diegans can afford to buy a home. Working families struggling to find loans that don’t require stellar credit, stated that a 20% down payment on home mortgages could make owning a home an impossibility.
Real estate agents also share that the housing market is blossoming, because people who are looking to buy homes can see that the amount of available homes in the area is waning. And, the inventory of distressed homes is down 25% in the past year. Realtors are realizing that well-priced homes are appealing to a number of bidders. So homeowners who are not behind on their mortgages have not yet decided to put their homes on the market.
This means the normal “for sale” inventory in the area has declined—a six month supply of homes has been depleted in less than three months. In downtown San Diego, there is only a one-month supply inventory of homes. This is a clear indication that the prices of San Diego residential properties can only get higher.
Still, some financial analysts say that San Diego’s home prices are near “bottom.” Prices still need to drop more in the southbay areas of the county, but mortgage rates are, overall, significantly low, and homes are affordable. But, as rates decrease, home prices can increase, but mortgage payments may remain the same or go down. This means that inflation because of low rates, along with low inventory. The real estate cycle is no shorter than 10 years, and the San Diego housing market is only four or five years into this particular cycle.