San Diego Real Estate Insider

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."

Ocean Beach real estate market update

The Ocean Beach real estate market, a generally upscale residential section of the larger San Diego County housing market, finally saw a decrease in the median price of a property in the most recent tracking period. Despite the fall in the average price of an Ocean Beach home for sale, the local economy should not face a so-called double dip recession. According to an August 27, 2010 article from the San Diego Union Tribune, "Even with the horrific housing downturn, we here in San Diego are still pretty cocky about how our housing prices (typically) appreciate more quickly than, say, Dubuque, Iowa. Sure, we have our busts but we have our booms, too. Plus — the argument goes — we have one of the most desirable locales in the country with very little buildable land so our prices should outpace those less-glamorous areas. But despite all that, San Diego doesn’t hold a candle to Dubuque, Springfield, Ill. or Buffalo, N.Y. when it comes to rising home prices, at least according to a recent report by the Federal Housing Finance Agency . The agency, which oversees Freddie Mac and Fannie Mae, tracks home sales price information by looking at mortgages — both sales and refinances — acquired through those lenders...San Diego, by way of comparison, ranked 50th of the 303 areas surveyed with a decrease in home prices of -1.05 percent."

One local economist noted in the Union-Tribune that a double-dip recession is unlikely this year, siding with a majority of economists in the region. The interview noted that "The momentum for recovery is stalling. A “double dip” is not some type of special event. It is the loose statistical concept defined as the slowdown of GDP (gross domestic product) to negative after a quarter or two of positive growth —a recession followed by a short-lived recovery, followed by another recession. It takes the shape of a W. The pace of the recovery is slow, whatever you call it! The key problem is that the unemployment rate is stubbornly high...In contrast, San Diego is likely to prove out as a model of regional economic transition, because this is a technology hub (informational, Pharma[ceuticals] and software), as well as the presence of our military bases. We will fare far better, in terms of the pace of recovery and our long term sustenance, than most regions in the nation."

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Mission Beach real estate housing market

The Mission Beach real estate market, a predominately residential and somewhat high-end portion of the larger San Diego County housing market, saw sharp declines in the month of July. The number of properties sold declined in both the region and the nation at large, at least partially because of the expiration of the federal tax credit. An August 24, 2010 article from San Diego 10 News stated that "According to numbers released Tuesday by the National Association of Realtors, home sales nationwide for July dropped by more than 27 percent -- which follows a large decrease in San Diego County. Since the Federal Homebuyer Tax Credit expired, home sales in San Diego have dropped off quite a bit, and real estate experts believe things may not change anytime soon. Despite the lowest mortgage rates in years and with some homes on the market that many would consider bargains, home sales around the county are slumping...According to MDA DataQuick, the number of homes sold in the county fell 21 percent from June to July, and experts cited the end of the Federal Homebuyer tax credit as a big reason why...Still, many would-be buyers are too afraid of not being able to afford a mortgage during tough economic times...Nationwide, the inventory of unsold homes on the market grew to nearly 4 million in July -- a 12-and-a-half month supply that is the highest level in more than a decade. The supply of inventory in San Diego is 4-and-a-half months."

On a slightly more positive note, fewer Mission Beach homes for sale were the result of foreclosures in the most recent tracking period, According to an August 12, 2010 report from the San Diego Union-Tribune, "Foreclosure activity in San Diego County dropped dramatically in July from the previous year, say two different reports. RealtyTrac, an online foreclosure marketplace, found there were 5,032 foreclosure filings -- which include default notices, scheduled auctions and bank repossessions -- a decrease of more than 37 percent from July 2009 when there were 8,031 filings. Foreclosure activity was up slightly, a little over 1 percent, from the previous month."

Oceanside Real Estate Market

The Oceanside real estate market, a relatively high-end residential section of the larger San Diego County real estate housing market, has been facing difficult times following the end of the federal housing market rebate. The median sales price rallied slightly in the month of July, although the number of sales fell dramatically. According to an August 16, 2010 report from the San Diego Union-Tribune, “San Diego County housing sales dropped 21 percent from June as the end to federal rebates took hold, MDA DataQuick reported Monday. Sales were also down 19.4 percent from July 2009, making this the slowest July since 1995. It was the lowest July for new-home sales since DataQuick began tracking the San Diego market in 1988. There were only 210 sales in that category last month, down from 421 in June and 277 in July 2009. However, overall median prices were up by $2,500 from June to $338,000, but not quite above the $340,000 figure in May that was highest in the current cycle. Economists have been saying for months that sales would likely slow because buyers were taking advantage of the $8,000 federal first-time homebuyer tax credit and a slightly smaller amount for repeat buyers. The rebates ended in April and buyers were trying to beat the June 30 deadline to close escrow…But the bulk of rebate-motivated buyers seem to have filed the necessary paperwork in June, naturally leaving fewer people in the pipeline for July -- hence the dropoff in sales. For San Diego, the sales count was 3,070, down 21 percent from June's 3,885 -- the biggest June-July dropoff since 1995.”

The trend observed for Oceanside homes for sale has been generally reflected across the entire Golden State. An August 20, 2010 article from the Los Angeles Times noted that “California home prices remained almost flat in July but sales stalled as federal tax credits for buyers expired. The median price paid for a home last month was $268,000, down less than 1% from June, and up 7.2% from July 2009, according to MDA DataQuick of San Diego. The year-over-year increase was the ninth in a row after 27 months of year-over-year declines, the real estate research firm said Thursday. The bottom of the current cycle was $221,000 in April 2009, while the peak median was $484,000 in early 2007. The median price is the point at which half the homes sold for more and half for less.”

La Jolla real estate housing market

The La Jolla real estate housing market, a northern section of San Diego County, is facing difficult times following several months of stronger indicators. The prognosis for the future, however, remains unclear as different experts provide competing viewpoints. An August 17, 2010 report from the North County Times stated that “Home sales in North San Diego County fell precipitously in July, as a buying surge propelled by government incentives receded, leaving a crowd of sellers nervously courting a smaller pool of buyers, according to a Realtors group and real estate agents. Despite historically low mortgage interest rates below 5 percent, North County buyers acquired 721 houses in July, a 9.5 percent drop from June and a 19.9 percent drop from July 2009, according to the monthly HomeDex report from the North San Diego County Association of Realtors. The falling sales came mostly among homes priced under $400,000, thus reducing the effect of the slow market on the median house price, which sank 1.7 percent from June to $475,000, up 9 percent from July 2009. What buyers are sensing is a steady rise in the supply of houses available to them. The number of homes listed by Realtors in North County had increased seven months in a row by July, up 48 percent since December. But while the number of homes sold rose for a while, the figure fell 9.5 percent in June and then 9.5 percent again in July, on a monthly basis.”

One expert, echoing what seems to be the majority opinion, noted that the average price of a La Jolla or San Diego home for sale was likely to fall in the upcoming months. The economist was quoted in the San Diego Union-Tribune as saying that “Although there will be parts of San Diego’s housing market that will see prices and sales increases, the end of the tax rebates, continuing high unemployment and sluggish job growth, and inventory of foreclosed homes still to be released to the market, will cause overall prices and sales in San Diego to slump through the end of the year. Despite the decrease in home prices over the past three years, affordability remains a significant barrier for home buying, especially with tightened loan requirements including appropriate down payment.”