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Friday, April 15, 2005 | For the third straight month, sales of new and resale homes in San Diego County declined. Sales of new and existing homes fell from a total of 5,312 during March 2004 to 5,018 in March of this year.
The figures are from a report released by DataQuick, a San Diego real estate information and analysis firm.
The report also shows the rate of annual real estate appreciation fell from 22 percent in March of 2004 to 12.5 percent in March of 2005.
According to the report, San Diego had the biggest sales percentage drop, 5.5 percent, of six Southern California counties – San Diego, Los Angeles, San Bernardino, Orange, Ventura and Riverside. San Diego County’s rate of appreciation was also the lowest.
While the number of total homes sold in the county fell, prices continued to rise. DataQuick reports the median sales price increased from $424,000 in March of last year to $477,000 in March of 2005, a 12.5 percent increase.
That increase is less than half of what it was one year ago. And it’s just barely higher than the national average for 2004 which was 11.2 percent in 2004, according to data from the federal government.
Sanford Goodkin, president of Sandford R. Goodkin and Associates, has analyzed San Diego real estate since 1956, and he thinks the DataQuick numbers show the San Diego market has reached its peak.
“I would say that the combination of the pricing, higher interest rates and the huge amount of speculation has finally topped out the market,” Goodkin said.
Interest rates are the key to how much and how fast the San Diego real estate market cools off, Goodkin said. If interest rates rise slowly, the market will cool off gradually, and if the rates shoot up quickly, Goodkin said to look for a rapid fall in appreciation rates, and overall housing prices.
“It’s not surprising the San Diego numbers are at the low end because they were more pronounced on the way up,” said real estate analyst Gary London. “I wouldn’t be surprised if this trend continues for the rest of the year.”
Rob Bryan, who sells real estate for the Tristany Group in San Diego, said the slowdown is bringing buyers and sellers back to reality but that the bottom will not completely drop out of the San Diego housing market.
“People are still overly optimistic,” said real estate agent Linda Artiaga who has sold homes in central San Diego for over 20 years.
“The pricing has to be closer to the mark,” she said. “You just can’t ask what you want. Some people are having to drop prices. And the time on the market is longer.”
She noted some buyers are now adopting a wait-and-see attitude, something unheard of in the winter of 2003 and spring of 2004. Spring is a busy time of year in the real estate industry, and the next three months will go a long way towards indicating the extent of the slowdown
“If in six months those trends in data have continued, then I think you can say the train has left the station,” she said.
Patrick Heald is a freelance journalist who is also pursuing a teaching degree. He lives in San Diego.