San Diego Real Estate - San Diego Houses Sold 2011 - Year End Update

The San Diego real estate market was very active in 2011.  Twenty one thousand two hundred and sixty six San Diego houses sold during the year, an increase of about one percent over 2010.  Here is an excellent blog post from the top Keller Williams Realtors that gives the year-end summary: San Diego real estate (2011 Market Snapshot).

With the number of San Diego houses sold in 2011 up over the prior year, clearly there is strong demand at current prices.  The average prices of San Diego homes sold in 2011 declined slightly during the year, but this can be at least partially attributed to the increase in the number of Short Sales.  The average price of a three bedroom, three bathroom house with an average of 2,035 square feet was $483,670 in 2001, down from around $516,000 in 2010, a decrease of around six percent.  But the number of short sales increased by more than 20 percent, from 4,072 short sales in 2010 to 4,913 short sales in 2011.

Market times for San Diego homes sales increased from an average of 66 days in 2010 to an average of 76 days in 2011. Again, this increase can be almost entirely explained by the increase in the number of San Diego short sales.  Short sales take much longer to complete than traditional equity sales.  In 2011, houses in San Diego that were sold in short sales were on the market for an average of 150 days, more than twice the average of non-short sale properties.  The length of time to complete the short sales, combined with the uncertainty as to whether the short sales will be approved by the mortgagor at all, explains the lower sales prices of short sale homes. But for those who are not in a hurry to buy, short sales are an excellent opportunity to buy real estate at below-market prices.

Interest rates remain at extremely low levels, with 30 year fixed mortgages available in the 4% to 5% range.  The low interest rates combined with the the steeply reduced prices has made homes in San Diego more affordable than they have been in decades.  The rental market is tight, and rents in the area have skyrocketed over the past three years.  Savvy investors are snapping up San Diego houses with positive cash flow, and are poised to make large equity gains in the future.

Luxury homes in San Diego are continuing to see some downward price pressure.  The jumbo loan market has returned, but loan guidelines are strict, and the upper-end home buyers have been slow to return to the market. But the reduced prices of San Diego luxury homes did begin to attract upscale buyers in 2011, and we expect that trend to continue in 2012. Overall, the outlook for San Diego real estate in 2012 is extremely bright.

Happy New Year!