San Diego Real Estate Insider

April La Mesa Real Estate Market Update

The La Mesa housing market, a primarily residential portion of the larger San Diego County real estate market, saw decreasing levels of foreclosure and stagnant housing prices during the first two months of 2011. According to the S&P/Case Shiller Index, San Diego is one of the only two metropolitan areas in the United States to show year over year increases in median home price. However, compared to Washington D.C. (at 3.6%), the other city which saw a yearly increase, San Diego’s increase (0.1%) was considerably less impressive. Additionally, San Diego actually saw a drop in median price in month over month terms, falling by 1.2% from January 2011. This was the fifth time in six months that San Diego saw a monthly decrease in median price, including a 0.7% drop from December 2010 to January 2011. Compared to some markets, such as Detroit and Atlanta, San Diego was relatively healthy, but the continued preponderance of foreclosures overshadowed any nascent strength. Despite an eleven percent decrease in mortgage default notices between January and February, there were nearly 1,400 new defaults over the course of the month. In addition, the number of actual foreclosures showed a much less impressive decline compared to default notices, suggesting that short sales may be gaining popularity as a method of dealing with distressed properties.

In another sector of the San Diego housing market, residents of San Diego County paid slightly more for rent than in previous months. The average rent in March 2011 was $1,335, compared to $1,315 in March 2010, leading to the question of what exactly spurred an increase in rents at the same time as a month over month drop in median price. Additionally, there were actually more vacant rental properties (5% of the total) in March 2011 than in 2010 (4.8%), which is partially attributable to some unsuccessful new condominiums. The overall health of the economy may be one factor, considering that the University of San Diego’s economic index registered an emerging recovery, led by strength in the construction and employment sectors. All told, the index showed a substantial increase of 1.9%.

April San Diego Real Estate Market Update

The San Diego real estate market, which showed considerable strength and resilience throughout the economic recession, exhibited minimal movement and general lethargy in the first few months of 2011. In the S&P Case Shiller Index, which San Diego had remained at the top of for almost a year, showed San Diego median prices increasing just 0.1% year over year. On one hand, San Diego was one of only two metropolitan areas (the other was Washington D.C.) to show an increase in median price year over year. On the other hand, San Diego’s median home price actually dropped by more than one percent on a monthly level, falling 1.2% in January 2011 compared to December 2010 (the most recent figure for which comprehensive statistics are available from S&P Case Shiller). Home prices nationwide seem to indicate that median prices have either bottomed out or that the housing market may be moving towards a double dip recession. The month over month decline for San Diego properties also strengthened a larger trend in the region, since San Diego also saw a monthly decline in December of 2010 compared to November 2010. San Diego does continue to be one of the healthiest markets compared to the national average, but it also is much weaker than it was at its peak.

Foreclosures seemed to show positive trends in San Diego in February 2011, but upon closer inspection of the data a fall in default notices may in fact indicate that lenders are overwhelmed with distressed properties. On the surface, there were 1,373 notices of default (the first step of the foreclosure process) sent out to San Diego homeowners in February, representing a decrease of about eleven percent from January 2011 and a fall of more than one third from year ago levels. Actual foreclosures changed less in February 2011, decreasing by about six and a half percent from January and dropping by a little less than eight percent from last year. However, it is unclear to what extent these figures have been affected by the robo signing scandal, the residual influence of government stimulus programs, and the increased popularity of short sales for distressed properties. On a positive note, this month did mark a fifth straight year over year decline in the number of foreclosures.

Oceanside Real Estate Market Outlook

The Oceanside real estate market, part of the generally stable San Diego County housing market, saw a decrease in new home sales as well as a dip in median sales price. According to the San Diego Union Tribune, the nation as a whole saw a slightly higher number of new home sales while the San Diego region saw a slight decline. The Commerce Department reported that there were a total of 290,000 new home sales throughout the United States, an increase of about 15,000 from year-ago levels. Figures provided by MDA DataQuick, a real estate information service, indicated that there were a total of 259 new home sales in San Diego County, a decrease of about ten properties from October 2010 and a decline of more than one hundred properties from November 2009. New home sales have been struggling partially because of the easy availability of low cost “San Diego short sales,” which are often available for substantially less than market value. Hopefully, the improving economy will result in higher rates of home sales moving into the New Year. Specifically, the creation of new jobs in the upcoming months may result in the construction of additional properties near places of employment. However, some experts have suggested that the shortage of residential lots in the San Diego area will preclude the construction of additional homes. 

Whats Happening with La Jolla real estate

The La Jolla real estate market, part of the larger San Diego County housing market, saw some negative signs in the most recent tracking period. According to statistics released by the Case-Shiller index and reported by San Diego Union Tribune, October 2010 marked the first time in more than a year when the average sales price of a single family home in the region declined. The agency reported that the median price fell by one and a half percent between September 2010 and October 2010. Although the figure may seem negligible, it actually represents one of the most significant variations in the local market over the last year. For the last fifteen months, all of the monthly variations have been less than one and a half percent in either direction. The composition of the market remained relatively consistent, with the lower, middle, and high tiers of the market all losing about one and a half percent in average price. Measured relative to the bottom of the market, the San Diego market has rallied considerably, although it remains substantially lower than the pre-recession peak of the market. It is important to note that the Case-Shiller index measures median price with about a month of lag compared to other measurements, although it does provide much more detailed information.

Hows Scripps Ranch real estate market

The Scripps Ranch real estate market, a residential sector of the larger San Diego County housing market, saw a slowing rate of foreclosures as well as lower home values in the most recent tracking periods. According to statistics provided by real estate information service MDA DataQuick, the number of foreclosures in San Diego and mortgage defaults throughout San Diego County real estate properties declined compared to both year-ago and month-ago levels. The organization reported that there were a total of 1,660 mortgage defaults in November 2010, marking a decrease of more than four percent from October and a fall of about twenty-two percent compared to November 2009.  Similarly, there were only 723 completed foreclosures in November, a decrease of more than twenty-seven percent compared to October 2010 and a decline of more than thirty-two percent relative to November 2009. Although the exact reasons remain unclear, some experts have suggested that the improvement can be attributed to a generally improving economy. Other possible explanations or contributing factors include a seasonal drop off in foreclosures, and difficulties in processing foreclosure paperwork. However, it is possible that the decline is also a product of banks preparing a discharge of foreclosures in the upcoming year, which would mean that they may peak in the upcoming months.

Highlights of Rancho Penasquitos

A community of about 55,000 that technically lies within the city of San Diego, Rancho Penasquitos lies about 20 miles due north of downtown San Diego. The community is adjacent to a canyon, and this is likely where its name comes from, which means the ranch of little rocks in Spanish. The community lies east of Torrey Highlands and Del Mar Mesa, west of Carmel Mountain Ranch and Sabre Springs, north of Los Peñasquitos Canyon Preserve and Mira Mesa, and south of Black Mountain Ranch and Rancho Bernardo.

State Route 56 travels in an east-west direction through the community, connecting residents easily with other parts of the region. Most of the public schools in the community are under the administration of the Poway Unified School District, which is made up of 25 elementary schools, six middle schools, four high schools and a continuing education high school.

Rancho Peñasquitos is just south of the Black Mountain Open Space Park. It has its own Hilltop Community Park. Carmel Village Plaza is just northeast, and Los Peñasquitos Canyon Preserve lies just south, as well as its Canyonside Community Park. Rancho Los Peñasquitos Golf Course is a popular attraction year-round.

The community holds annual events and celebrations throughout the year such as the Fiesta de los Peñasquitos in May, the Fourth of July fireworks show, and a Christmas Card Lane in December. The nearest hospitals are Aurora San Diego Hospital in Carmel Mountain and Pomerado Hospital in Rancho Bernardo.

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Oceanside real estate market update

The Oceanside housing market, which is an upscale residential portion of the larger San Diego County real estate market, has been showing steady signs of improvement despite weaknesses in some commercial sectors. According to a September 28, 2010 report from the San Diego Business Journal, “While the nation’s housing values slowly rebound, prices in the San Diego region show a consistent growth trend, and increased for a 15th consecutive month in July. That ranked the region in second place among the country’s largest cities for the year, according to the latest Standard & Poor’s/Case-Shiller Home Price Index released Sept. 28. From June to July, San Diego’s median housing prices rose 0.7 percent, just a tenth of a percent below the composite average rise for the nation’s 10 largest cities, and a tenth of 1 percent above the composite average for the 20 biggest cities, the report stated. Yet looking at the past 12 months to July 2009, the Case-Shiller report shows San Diego’s housing prices increased by 9.3 percent, behind the increase for San Francisco’s housing prices, which rose 11.2 percent over the year, the report said.”

Oceanside homes for sale generally fared better than another portion of the San Diego County real estate market, the hotel sector. According to an October 11, 2010 article from the North County Times, “San Diego County led California in the number of hotels foreclosed in the third quarter with 13, followed by Riverside County with a dozen, according to a quarterly survey of distressed hotels in the state. In California, the 2010 survey for the three-month period ended Sept. 30 showed 529 hotels in default or foreclosure, a 10.7 percent increase from the quarter ended June 30, and a 71.2 percent increase over the third quarter ended a year ago. The survey was conducted by Irvine-based Atlas Hospitality, a brokerage that specializes in the sale of hotels. Los Angeles and San Bernardino counties followed San Diego and Riverside in the number of distressed hotels with 11 hotels each that were in default or foreclosure. Los Angeles County led the state in the number of defaulted hotels with 52, followed by San Diego County with 41 and San Bernardino with 37.”

La Costa real estate market update

The La Costa real estate market, part of the larger San Diego County housing market, has shown a consistent improvement in terms of median price during the most recent tracking periods. According to a September 28, 2010 report from the San Diego Reader, “Standard & Poor's Case-Shiller home price indices published this morning (Sept. 28) show San Francisco, San Diego and Los Angeles home values continuing to rise stoutly on a year-over-year basis, but S&P's David Blitzer says those expecting a return to lofty 2005-2006 levels may be disappointed. "Stable prices seem more likely," he says. San Diego home values rose 9.3% in July from a year earlier. San Francisco's were up 11.2% and Los Angeles's 7.5%, as California continued to pace the national rebound. One positive: San Diego values rose 0.7% from June to July versus 0.4% from May to June. However, Case-Shiller numbers are smoothed over several months. The effect of the first-time home buyer stimulus still has not faded from the numbers, warns Blitzer.”

The San Diego housing market has been one of the strongest examples of the recent economic recovery, posting relatively strong gains in most of the tracking periods. La Costa homes for sale have been purchased at a higher rate and for a higher price than many other regions in the Golden State. The greater San Diego region, including La Costa, has also been facing difficulties in the hotel market, with an extremely high rate of San Diego foreclosures during the third quarter of the year. During the three month period ending September 30, there were more than five hundred hotels in default or foreclosure throughout the entirety of California. This was a substantial increase over the last fiscal quarter, while it was more than a seventy percent jump from the same time last year. Among the cities of California, San Diego showed the almost the highest proportion of distressed hotel properties. For the most recent tracking period, the total arrived at approximately three and a half dozen distressed properties. It is also unclear how the expiration of the federal housing tax credit will impact residential and commercial properties.

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Carlsbad real estate market update

The Carlsbad real estate market, found in the midst of the San Diego County real estate housing market, is forecast to gradually recover during the course of the next year. Local experts have predicted an incremental recovery for the region despite an unfortunate increase in the preponderance of San Diego foreclosures as opposed to short sales in San Diego County. According to an October 4, 2010 report from the San Diego Union Tribune, “San Diego County home prices, which have risen sharply in the last 18 months, are likely to remain flat or drift slightly higher in 2011 as the rest of the state catches up, the California Association of Realtors said Monday. Robert A. Kleinhenz, deputy chief economist, said San Diego resale house price rises have already slowed from a 20.4 percent year-over-year rate of increase at the beginning of 2010 to 2.4 percent in August, when the median stood at $384,700, up from $375,706 a year earlier. They said prices and sales statewide both are likely to rise about 2 percent in 2011, after this year’s projected 11.5 percent price rise and 10 percent sales decline.” Of course, market conditions continue to be volatile and any number of factors may alter these variables of the course of the next fiscal year.

A vast majority of the distressed properties in the Carlsbad housing market are foreclosures as opposed to short sales. An October 18, 2010 report from the San Diego Real Estate Examiner provided the following perspective on the situation, stating that “Approximately 14,500 homes were in the process of foreclosure throughout San Diego County as of October 18, 2010. Yet of those foreclosures in process, only around 1,000 (7%) are listed for short sale whereby the owner settles the debt with their bank. This means that 93% of these San Diego homes will foreclose within the next few months and their owners may suffer the negative impacts for nearly 7 years...Making matters more ominous is that the investors of delinquent loans are squeezing the banks and loan servicers to expedite foreclosure procedures and timeframes. This means that delinquency and foreclosure proceedings will no longer be a way to get “free rent” in the near future.”

Coronado real estate housing market

The Coronado housing market, a part of the larger San Diego County real estate market, may have become somewhat overpriced following several months of steadily rising property values. As a result, fewer Coronado homes for sale have been purchased, mirroring a larger trend of fewer home sales in Southern California. According to an August 28, 2010 article from the Voice of San Diego, "The low monthly payments are no doubt luring renters off the fence.  But as I've often discussed, when it comes to determining whether homes are overpriced on a sustainable basis it's the price-based ratios that matter.  Rates are low now and they are giving the market a boost, but that is a transient effect that lasts only as long as the low rates.  If an individual buyer can lock in a low rate and stay in a home indefinitely, great -- but how expensive homes are in comparison to their long-term fundamentals is a different question entirely, and one in which rates really aren't relevant. So we've got a serious mixed bag of signals.  The payment ratios say homes are dirt cheap, but alas, that is the far less meaningful indicator.  The more valuable price ratios are throwing off mixed signals -- by their account, aggregate home prices are reasonable compared to incomes but flirting with overvaluation compared to rents."

Several sectors of the Southern California housing market, including San Diego County, saw an increase in median price as well as a drop-off in sales figures during the month of July. According to an August 24, 2010 report from the Santa Barbara Personal Finance Examiner, "The report broke the data down into regions. Homes valued between $100,000 and $250,000 in the western United States declined 31.0 percent. Homes valued between $250,000 and $500,000 declined 24.7 percent. In southern California, home prices may have increased, according to the data. Prices were up 4.6 percent compared to the same period last year, while home sales declined 15.2 percent. The median price for southern California, including LA and San Diego, increased from $372,100 in July of 2009 to $389,400 in July of 2010. The higher prices may not last long because now there is a glut of homes on the market."