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%.