The San Diego Real Estate Insider Blog

The 4S Ranch real estate market, found in an upscale portion of San Diego County, is continuing to show signs of improvement despite remaining far away from the peak of the housing market. According to a July 27, 2010 report from the San Diego Reader, “San Diego's home values jumped 12.4% from May of last year to this May, according to Case-Shiller data released this morning (July 27) by Standard & Poor's. The only market which did better on a year-over-year basis was San Francisco, up 18.3%. Minneapolis was up 11.6% and Los Angeles 9.7%. Values in 7 of the top 20 metro areas continued to fall; Las Vegas was down 6.5%. The overall index for the top 20 markets rose 4.6%. San Diego's home prices are now down 34.8% from the November, 2005 peak. S&P economist David Blitzer cautioned that the homebuyers' tax credit still positively affected the numbers; it had some effect on purchases that closed through June 30. "We need to watch where the housing markets will go after these temporary stimuli go away," said Blitzer. "Since reaching its recent trough in April 2009, the housing market has really only stabilized at this lower level...the housing market might bounce along the bottom for the foreseeable future."

4S Ranch homes for sale continue to be far lower in median price than the peaks reached a few years ago. An August 4, 2010 article from the San Diego Union Tribune found that “Ever wonder when, oh, when your home is going to be worth what it was back in the heady days of the housing bubble? Try 2024. Gulp. Back in March, Fiserv, which generates data for the widely watched Case-Shiller Housing Index, created a report to estimate long it would take 384 metro areas throughout the country to regain their peak home prices. Some markets like Cheyenne, Wyo., Bowling Green, Ky., and Billings, Mont. were projected to get back to their peaks some time next year. Believe it or not, Anchorage, Alaska was slated to return to its peak later this year…Before you curse your bad luck for living here and not, ahem, Cheyenne, consider the Miami and Orlando markets. Fiserv expects them to regain the peak price sometime beyond 2039.”

The Rancho Santa Fe housing market, a high-end residential portion of the larger San Diego real estate market, saw several positive signs in the most recent tracking periods. Foreclosures are at their lowest level in years, and the median value of properties in the region has risen once again. According to an August 9, 2010 report from the San Diego Union Tribune, “Home values in San Diego County were up 7.3 percent in the second quarter from a year ago -- the biggest increase of the country's 25 largest metro areas -- says real estate website Zillow.com in a recent survey. Nationwide home values fell 3.2 percent for the same time period, with values declining on year-over-year basis in 99 of the 144 markets studied. The Seattle-based company comes up with its home-value index by looking not only at homes that have sold but also at pending sales as well as homes that are currently not on the market. In San Diego County, the median home value rose to $378,800 in the second quarter.”

There are also fewer distressed properties among Rancho Santa Fe homes for sale, thanks largely to a continuing decline in the number of foreclosures. A July 21, 2010 report also from the San Diego Union Tribune noted that “San Diego County had fewer mortgage defaults and foreclosures in the second quarter than it has had in the past three years, according to a report released today by MDA DataQuick, a real-estate research firm based in La Jolla. Countywide, 5,458 homes went into default during the second quarter, a 45 percent drop from the total of 9,866 during the same period of last year. That’s the lowest number since the second quarter of 2007, just as the county was slipping into recession. Foreclosures dropped 6 percent from 3,518 in the second quarter of 2009 to 3,315. The same trend is showing up throughout California, with the number of defaults dropping for five consecutive months, resulting in a 44 percent year-to-year drop. Foreclosures, however, rose by 4 percent, driven partly by jumps in relatively pricy neighborhoods in Orange County, San Mateo, Marin, Los Angeles, Santa Barbara and San Francisco counties.”

La Mesa, California, is a city in the San Diego metropolitan area home to a population of around 60,000. It lies near to San Diego State University and just about 12 miles northeast of the city of San Diego and about that same distance from the sea. The city is located in the eastern portion of San Diego County, which is generally known for having some of the area's lower real estate prices.

San Diego real estate as a whole has been adversely affected by the struggling national market over the past several years, and these effects have trickled down to the La Mesa real estate market as well. The past two and a half years have seen a substantial decline in home values at the same time as a precipitous rise in the number of foreclosures in La Mesa as homeowners have found themselves underwater on their mortgages or unable to afford their house payments due to unemployment or the high rates of interest rates that reset.

The large dips and roller coaster journey appear to be over for homes for sale in La Mesa, which have mostly stabilized in recent months, with only small increases or decreases in most categories. According to the San Diego Union Tribune's monthly data chart, in June, one of La Mesa's zip codes saw the median value of homes sold decline a slight 3.4% annually to $390,000; the city's other zip code, however, saw prices rise 1.5% to $335,000. There were 44 total single-familiy homes sold in June. The market for condos saw slightly more price movement: one zip code saw its median condo resale value rise 4.6% to $400,000, while the other saw its median price fall 9.2% to $182,500.

The price of single-family homes by square foot has actually risen in La Mesa on an annual basis though. The price per square foot in June was $263 and $271, respectively, in the city's two zip codes. These figures were an improvement of 5.8% and 12% from 2009's figures of $248 and $241. The square-foot price of condos saw a dip in price in one market, from $184 to $144, but with only two sales in the month for that area, the figures must be viewed skeptically. The other zip code saw a reliable 22 condos sold, enough to trust the median figure of price per square foot, which rose from $185 to $190, a 2.4% increase.

Arguably one of the most picturesque cities in America with some of the best weather, San Diego, California, is a city with coveted addresses, many situated right along the Pacific coast. The number of people wanting to flock to this southern California haven never seems to diminish, as its population continues rising. The city, the eighth-largest in America and the second-largest in California, was estimated to be home to a population of about 1.4 million in 2010, with 2.8 million in regions beyond the city limits. The city is also considered the fifth-richest major city in America, and is thus naturally home to a higher-priced real estate market than most cities.

San Diego was hit hard by the downturn in the housing market in the U.S. the erupted after the financial crisis and ensuing recession brought about, at least in large part, due to the subprime mortgage explosion. The median values of San Diego real estate fell substantially over this period as the demand for real estate dried up and many potential, qualified homeowners found themselves unable to qualify for financing on a new home. Likewise, many mortgage holders living beyond their means saw their payments catch up with them, and the number of foreclosures in San Diego rose to near all-time highs.

According the San Diego Union Tribune monthly real estate chart, June, the most recent month for which statistics have been compiled, saw a mixed bag. In Central San Diego, there were 597 single-family homes sold at a median price of $405,000, up 11% annually, an encouraging improvement. The market for condos, however, did not show such improvement. There were 493 condos sold in central San Diego in June at a median price of just $254,000, down 2.3% year-over-year. New homes for sale in San Diego were hit the hardest as the demand for newly built homes remains scant. There were 91 new homes sold during June in the city at a median price of $314,500, down a full 39.2% from the same time one year ago.

The eastern portions of San Diego County saw increases in all three categories of single-family home prices, condo prices and new home prices, as did the area considered North County/Inland. Coastal areas in the northern part of the county saw home prices rise 9.3% but condo prices fall 5.7% and new home prices fall 14.6%. The southern parts of the county, too, saw rises in resale homes and condos but a 20% decline in new home prices. These statistics all seem to point to a brighter future still ahead for San Diego, albeit at a more cautious, steady pace.

The La Costa real estate market, part of the larger San Diego County housing market, showed a full year’s worth of rising median prices. This is indicative of a strong improvement in the area, although at least a portion of the economic recovery might have been driven by the expiring federal tax credit. According to a June 29, 2010 article from the Voice of San Diego, “San Diego County home prices rose 11.7 percent in April compared to same time last year. And prices were up 0.7 percent between this March and April, the 12th in a string of consecutive monthly price increases since prices hit a low last spring. The numbers out this morning from the Standard & Poor's/Case-Shiller home price index show the one of the last months of the scramble for the federal homebuyer's tax credit. The analysts behind the index noted that though many metropolitan areas around the country showed these kinds of increases in April, this morning's report concluded that nationally, "home prices do not yet show signs of sustained recovery." San Diego was the only market out of the 20 the index measures that did not dip negative in the winter months. From the peak in November 2005, prices fell 42 percent to reach the market low in April 2009. Now they've roared back to a slighter 30.62 percent off the peak. San Diego County prices are still 61 percent higher than they were in January 2000.”

This positive trend for La Costa and San Diego County houses for sale has extended to the larger Southern California region. According to a June 15, 2010 report from the San Diego Union-Tribune, “Home prices throughout Southern California rose by 22.5 percent in May, the highest year-over-year jump in five years, MDA DataQuick reported Tuesday. But some housing economists say that pace will not hold up much longer. In fact, they think it could actually reverse course and result in lower prices by year’s end. The reason? Prices have risen only because the housing market is returning to a normal mix of low-, medium- and high-cost sales. From now on, it will be the economy, not interest rates or government stimulus programs, that determines supply, demand and price levels. And the economy is not recovering fast enough to stimulate much demand.”

The Carlsbad housing market, part of the larger San Diego County real estate market, saw consistent signs of improvement along with the rest of the Golden State. According to a July 7, 2010 report from Sight on San Diego, “San Diego County’s home prices rose 7 percent in May from the previous year, the second highest year-over-year increase in the country, according to the real estate website zillow.com. Nationwide, home prices dropped 3.8 percent in the same time period. The Seattle-based company comes up with its home-value index by looking not only at homes that have sold but also pending sales as well as homes that are not on the market. In San Diego County, the median home price was $375,400, a 1 percent increase from the previous month. Of course, that’s down 30.1 percent from the peak median price of $538,200 in October 2005. Here is the breakdown of Zillow’s numbers, which it releases every month, and how they compare with other home-price statistics: How do we rank? In terms of price increases, San Diego County is second only to the Virginia Beach, Va., metro area. When compared with major metro areas, San Diego is No. 1. Next are San Francisco with a 5.9 percent increase, Los Angeles with a 5.3 increase, San Jose and Santa Barbara each with a 4.7 increase. If the list seems a little California-centric, it is. Of the top 10 markets, six of them are in the Golden State. How about in terms of home price? San Diego has the ninth highest median home price.”

Carlsbad houses for sale were caught up in the larger trends of the San Diego housing market throughout recent months. San Diego County saw some of the most consistent and largest gains in the entirety of the country. The Carlsbad real estate market saw several straight months of increasing median prices, as well as decreases in foreclosures and increased sales volumes. The entirety of the Golden State has been rallying strongly in the most recent tracking periods, although it is not entirely clear what was the result of the federal tax credit and what was part of the natural economic cycle.