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Friday, February 10, 2006 | For the last few years, there were maybe a couple of homes for sale at any one time in the Morningside development in Sabre Springs, a local realtor said.
Right now, there are 10.
The huddle of houses for sale in the San Diego neighborhood is part of a growing phenomenon in San Diego County real estate. “Cluster selling,” which Realtors said they haven’t seen since the mid-1990s, is now becoming evident in several San Diego neighborhoods.
“People are getting nervous. They’re seeing their neighbors selling their home and they’re thinking maybe now I should go ahead and put mine on the market before they take something really low and the prices go down,” said Karen Whitfield, a Realtor with Re/Max Hometown Realtors in Santee.
The prevalence of such cluster selling is undoubtedly adding to the high levels of real estate inventory in the San Diego County market. There were 16,464 homes on the market Wednesday, according to
Alan Gin, professor of economics at the University of San Diego’s Burnham-Moores Center for Real Estate, said he doesn’t read too much into the trend towards cluster selling.
Gin said homes sales generally lead to more home sales, whether the sales prices are high or low. When a home sells for more than expected, Gin said, the neighbors may try to cash in their equity. When a home sells for a disappointing price, however, the neighbors may think it’s time to bail.
Gin said it’s too early to tell whether the selling trends being seen in the county could lead to a larger “chain reaction” in selling, as homeowners scramble to cash in on the equity gains they have seen in the past few years.
“I’d like to see more data,” he said.
But Realtors said they are certainly starting to see homeowners who want to cash in on their homes in the face of an uncertain future for home values. Indeed, some Realtors said they are advising their clients that selling now, rather than in a few months, is a good idea, if only because it could take a few months to sell their home.
“You might as well get into the market right now. I don’t care if you’ve got to move out and move into an apartment for a couple of months. You’d be a lot cheaper doing that now, and probably get a better price now,” said Gordon Kane, a realtor with Help-U-Sell Realty in Poway.
Many investors and first time buyers have ridden the wave of price increases this far, Realtors said, and are now ready to paddle to shore before they get wiped out.
“We see a lot of move-out buyers,” said Judy Kesselring, a Realtor with Keller Williams Realty in Escondido. “You have a young couple in a condo who decide to have a family and buy a home. They don’t want to pay $600,000 for a small home, so they say ‘I’m going to take my equity and go to Arizona or Nevada.’ “
But Russ Valone, president and CEO of MarketPointe Realty Advisors in San Diego, said moving away from California because you’ve made some money on your house is generally a bad idea. He said he always has the same advice for people looking to move elsewhere.
“Go where you’re going to go, keep your house here, move there, spend 12 to 24 months there and make sure that’s where you want to be. Because once you exit, the price of re-entry – even if the market remains relatively flat – means it’s still very difficult to do,” Valone said.
If the trend towards cluster selling means speculators – people who purchase homes solely as investments – are getting out of the real estate market, then Valone said that’s good for everyone in the long-term. He doesn’t buy the argument that such trends will lead to a chain reaction or panic selling, and said that instead they signal a return to a normal market. That’s a market with modest year-on-year property value gains and where the people who buy houses actually plan to live in them.
Rich Toscano, a Voice of San Diego columnist and an independent real estate analyst, said he’s fascinated by the rise in cluster selling.
“While the countywide median home price is up over last year, more than 20 percent of San Diego ZIP codes have seen year-over-year median price declines of 5 percent or more. ‘Cluster selling’ could potentially explain the regional disparity in home price performance,” Toscano said.
With home prices so reliant on the optimistic or pessimistic sentiment flowing through the proverbial grapevine, Toscano said the latest trends could be indicative of a changing attitude about San Diego’s housing market.
Please contact Will Carless directly at