San Diego Real Estate- Market Statistics Indicate Housing Market Firming in San Diego

San Diego county median home price for July tended up from June figures as were the reported number of sales. Are we at the bottom of the market heading up?

There seems to be a growing confidence by REALTORS locally as well as nationally that conditions are improving in the respective markets and a recent survey by NAR ( our National Association of REALTORS ) REALTORS nationwide feel confident of continual improvement over the next 6 months.  Does that survey reflect wishful thinking or just sending out the positive vibes needed to get Buyers off the fence?

I raise this question because in the same report NAR’s Housing Afordability Index ( HAI ) indicated that housing was a bit less affordable in it’s last released report. Actually since the high reached in April of 178.8, the last reported AHI is 159.2. That is a clear trend that affordability is declining. I Googled the NAR Housing Affordability Index and this is how it is calculated ( just in case you were wondering).
 

[The NATIONAL ASSOCIATION OF REALTORS® Affordability Index measures whether or not a typical family could qualify for a mortgage loan on a typical home. A typical home is defined as the national median-priced, existing single-family home as calculated by NAR. The typical family is defined as one earning the median family income as reported by the U.S. Bureau of the Census. The prevailing mortgage interest rate is the effective rate on loans closed on existing homes from the Federal Housing Finance Board and HSH Associates, Butler, N.J. These components are used to determine if the median income family can qualify for a mortgage on a typical home.

To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. For example, a composite HAI of 120.0 means a family earning the median family income has 120% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home. An increase in the HAI, then, shows that this family is more able to afford the median priced home.

The calculation assumes a down payment of 20 percent of the home price and it assumes a qualifying ratio of 25 percent. That means the monthly P&I payment cannot exceed 25 percent of a the median family monthly income ]

With a bit more breakdown of the market stats in Southern California, DataQuick reported  that 20.1% of the resale market solds were above the $500,000 value line compared to the lower percent  recorded this year of 15%. San Diego’s percentage was 27.9 % indicating that San Diego is doing better on average of the other 5 regions  making up Southern California.

Other statistics of note were that the percentage of foreclosed homes was at 37.4 % of all the resales for the month. Investor purchasing increased from 15.4 to 19.4 percent of recorded sales.

I hope I am missing something here as these numbers alone do not necessarily bode that well for our equity resale market. Especially when you factor in the more difficult processes for obtaining financing, the HCVV appraisal issues, increasing state and local unemployment, state and local treasuries needing new sources and increased tax revenue to balance budgets and pay debts, with so many homeowners not previously affected by the sub-prime crisis but are now upside down in their homes,  bucket loads of new properties to hit the foreclosure market this next month, does the slight increase in month over month sales and prices indicate we are at the bottom moving up? Yep, the title says it all. Maybe the analogy of setting Jello is applicable here. While it is firming up, it is still pretty shaky.

Statistics for July 2008 through July 2009

     July 2008 Home Sales  3,431

     July 2009 Home Sales 3,809   ( This reflects an 11% increase in Sales ).

     July 2008 Median Home Price in San Diego  $364,000

     July 2009 Median Home Price in San Diego  $320.000   ( This reflects a 12.1 % drop from 2008 but a 3% increase

                                                                                                over June 2009 reported at $316,000 and thus the title).

If you are Buying, Selling or Relocating to San Diego and need help from a professional REALTOR®, give me a call or visit my San Diego Real Estate website and  sign up for Listing alerts for your favorite San Diego Home and Condominium Property Searches. I specialize in Single Family Homes and Condominiums throughout the coast and inland areas of San Diego. Some of the communities are La Jolla, University Town Center, Bay Park, Mission Valley, Pacific Beach, Scripts Ranch, Poway, Carmel Mountain Ranch, Rancho Bernardo, Rancho Penasquitos,Carmel Valley and Solana Beach. If I didn't mention a city or community that you are interested in, just let me know  and i will find you an expert for that community as well.

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Copyright 2009 William Johnson author of The Real Estate Text Book
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