So How IS The San Diego Real Estate Market?

San Diego's real estate market is doing better than the rest of the U.S.

Could this be the most popular question on peoples’ minds in San Diego? Well if it’s not it’s surely towards the top of the list. So what is the answer? The answer is that the San Diego real estate market is out performing the rest of the nation and seems to be laying down a good foundation on which to build a recovery. Though the road to full recovery is not going to be a short one nor an easy one for everyone our local San Diego real estate market has been touted for it’s progress and it’s avoidance of obstacles that might slowdown it’s recovery.

The San Diego housing market is still along the bottom from what we see but it’s bouncing ever so often. Things such as the first time home buyer’s tax credit and seasonal changes have helped the market and the market has adjusted after these things have run their course. The interesting thing is that prices have not dropped off even after the stimuli have come and gone. It’s still not the ideal time to sell but predictions for home prices point to a slight and modest increase versus a drop. An inventory of distressed properties, such as REO’s, foreclosures and short sales, is still to come but we’ve observed how financial institutions are releasing these assets on a more controlled schedule rather than the flood set upon the market when the ship started to sink. This strategic release is sure to keep prices from suddenly crashing as before as well as help control inventory which is also crucial to prices.

As the data comes in we analyse it we come up with this picture for February of this year. According to figures both the number of homes and the price of homes rose in February of this year from January of this year. The median home price for all homes rose but is still about 4% lower than February of last year. A 4% difference is great considering some of the drops of recent years that were in double digits. The number of homes sold also increased by 3.6% which is also down slightly, 5.5%, from January of 2010.

One of the major factors leading to these figures is the number, and more importantly the percentage, of distressed property sales. Distressed homes accounted for about 55% of all resold  homes in the San Diego real estate market up from 38.2%  in January of this year.  Distressed homes broke down into foreclosures which accounted for 34%, and short saleswhich accounted for the other 21% of the total.

Yet another interesting figure is the amount of buyers who purchased homes using all cash. Last month we reported that 28% of the sales in January in the San Diego housing market were purchased all cash. We also told you that the figure for the overall California real estate market showed a similar increase in the number of homes bought with cash. Well February was no different than January with one exception. February of this year we saw 30% of homes sold in the San Diego real estate market purchased with all cash. This is a sure sign that investors are coming in and buying homes for pennies on the dollar foreseeing a return of the market in the near future.

So what does this mean for the San Diego buyers? It means that for those buyers that waited there are still deals to be found. Interest rates are still low, prices are still low and the inventory is still good. But it also means that there will be more competition in those coveted price points and neighborhoods. A good deal isn’t going to stay on the market long now that we’re seeing investors buying up the inventory. One things is for sure San Diego real estate market and with it’s ideal weather and location will always garner more than other parts of the country. So enjoy our warm snowless winters and our fantastic returns on real estate. Just remember that the last spike in prices was an unrealistic and unsustainable one and you’ll be just fine.