san diego county
Market Overview a monthly real estate report | April 2010
The State of the Market
For the past few years, California has
experienced significant setbacks in housing
— including its dubious position as the state
with the second-highest foreclosure rate in the
nation.
According to the California Association of
REALTORS® recent study of 2009 and 2010
home sellers, 67% of California home owners
put their homes on the market in 2009 as a
result of difficulties related to meeting their
mortgage obligation. That’s a substantial
increase over 2008, when the figure was 20%,
or one in five home owners.
Among the reasons for such sales cited in 2009
and 2010 were difficulty meeting mortgage
obligations (30%), job loss (18%) and resetting
adjustable loans (18%). Lower housing
prices rendered some home owners unable to
refinance; others saw home prices fall below
what they owed on their mortgages.
Not surprisingly, only 7.5% of sellers surveyed
reported they had a fixed-rate mortgage. 92.5%
had an adjustable rate mortgage (ARM) with a
two-year, three-year or five-year fixed rate, or a
negative amortization ARM.
Nearly half of homes sold in 2009 were either
distressed homes in some stage of foreclosure
or short sales. As a result of having such a high
number of distressed properties on the market,
the sale price of homes sold in 2009 averaged
$20,958 less than the original asking price and
$32,315 less than the median asking price.
Just as sellers found difficulties in meeting
mortgage obligations in 2009, buyers also
faced financing challenges. A startling 63%
of homes fell out of escrow prior to closing,
with nearly 70% of buyers unable to get an
acceptable mortgage, according to sellers
surveyed. More than 60% of sellers cited
buyers “backing out” as the primary reason the
home fell out of escrow. Other reasons cited
were buyer’s remorse (26%), lender withdrew
and did not fund (24%), and declining home
prices (18%).
Even homes that sold faced hurdles, failing
to close on time 50% of the time compared
to 36% of the time in 2008. Subsequently,
seller confidence in buyers’ ability to close
plummeted, with 75% of sellers reporting
concern, an increase from 54% in 2008.
Particularly hard-hit were first-time sellers
(59%). Nearly half of surveyed sellers had
owned their homes for two years or less,
compared to one-third in 2008. First-time
home sellers increased to 44% of all sellers,
compared to 33% in 2008.
After such a thrashing, one out of three sellers
surveyed moved out of California in 2009,
compared to one of four in 2008.
According to First American CoreLogic, 35%
of California mortgage holders are underwater
— meaning they owe more on their mortgage
than their home is worth. This makes it appear
that 2010 will be as challenging for sellers as
2009 was.
Good news for buyers
As difficult as the market is for sellers, buyers
are responding to extraordinary incentives —
including the most affordable home prices in
a decade, historically low government-aided
mortgage interest rates and a continuing supply
of distressed homes to keep sellers realistic
about pricing.
In addition, the federal tax credit for first-time
and move-up buyers is good until the end of
April 2010. Qualified buyers need only have a
solid contract and take possession by June 31,
2010.
Proof that incentives are working is the increase
in first-time home buyers: 47% in 2009,
up from 35.9% in 2008. That’s the highest
percentage increase since 1995. Typically, says
the National Association of REALTORS®,
first-time home buyers make up about 40% of
the market.
In a recent survey of home buyers, C.A.R.
found nearly 40% said they would not have
purchased without the tax credit incentive. One
reason for its strong appeal is that the Federal
Housing Administration (FHA) increased its
qualifying loan guarantee from $362,790 to
$729,750 for high-cost areas such as California.
Reflecting that move, the percentage of home
buyers using an FHA-insured loan increased to
32% in 2009 from 18.9% in 2008. These loans
also allowed first-timers to buy bigger. Most
purchased single-family homes (80%) at an
average 1,560 square feet, compared to 1,300
square feet in 2005.
Investors also jumped back in the pool, with
70% purchasing short sales and REOs (bank-
owned properties.) The median price of a
typical investment property was a $232,750,
with a median size of 1,367 square feet.
The momentum generated by first-time and
move-up buyers purchasing with government-
guaranteed loans and investors buying with cash
largely moved homes priced under $500,000,
causing quick sales, multiple offers and rising
prices in “affordable” homes.
For those reasons, the median California home
price is projected to increase to $280,000 in
2010 from $271,000 in 2009.Like the rest
of the nation, home sales volume declined
in February 2010 (-2.2% from January), but
curiously, the median price rose 14.1% year-
over-year, from $245,230 in February 2009 to
$279,840.
California Association of REALTORS® chief This is the time to go by the numbers.
economist Leslie Appleton-Young explains Currently, jumbo loans are also benefiting
the anomaly: “Supply continues to lag from government-suppressed mortgage
demand at the $1 million and above level interest rates.
with 27.9 months of supply on hand a year
ago, and at 15.7 months on hand to date. Advice for sellers: Because of the
Overall in all price ranges, C.A.R.’s Unsold unpredictability of what buyers will do
Inventory Index stands at 6.3 months on once stimulus incentives are over, now is the
hand compared to 7.1 months’ supply a time to put the best possible price on your
year ago. home. The luxury market is improving, but
that doesn’t mean buyers’ appetites for good
Advice for buyers: Because of uncertainty buys have diminished. The more negatives
about what will happen in the marketplace you can overcome before a buyer sees your
after the home buyer tax incentive is home, the less there will be to negotiate and
removed, home buyers may be tempted to the higher the likelihood of agreeing on a
wait and see if prices fall further — but that price and terms quickly and solidly.
possibility must be weighed against possible
rising mortgage interest rates or tighter loan
standards.

SAN DIEGO COUNTY

Like other markets in Southern California, San Diego County is enjoying a healthy seller’s market in homes
priced under $1 million. Homes priced up to $3 million are not quite oversupplied, as upscale and unique
homes aren’t expected to sell as rapidly as affordable homes. Homes priced above $5 million are in
serious oversupply.

*A balanced market is widely accepted as having six months of inventory on hand with market conditions favorable to both buyers and
sellers. A buyer’s market is characterized by conditions such as high inventories, falling prices, concessions by sellers, and incentives
among other indicators. A seller’s market has low inventories of homes for sale, escalating prices, and keen competition between buyers,
including multiple offers.

Inventory in Months’ Supply – March 1, 2010

All residential properties in SANDICOR MLS

Inventory in Month’s Supply

Less than $1 million 2.4

Upscale inventories tip toward serious oversupply at the
$1 million to less than $2 million 10.3
$3 million price range and above.
$2 million to less than $3 million 15.7
$3 million to less than $4 million 26.2
$4 million to less than $5 million 25.5
$5 million to less than $6 million 51.3
$6 million to less than $7 million 38.4
$7 million and over 45.0

0.0 10.0 20.0 30.0 40.0 50.0 60.0

Copyright © 2010, Real Data Strategies, Inc. All rights reserved. Use is by license agreement only.
 Monthly Listings Taken and Absorbed
All residential $1M+ properties in SANDICOR MLS
12 months through February, 2010

Monthly Listings Taken and Absorbed

Properties $1,000,000 and above
500 200
New Listings Listings Absorbed
461 New listings have flooded the market (up 62%) since
hitting lows in Q4 2009, while absorption rates haven’t
400 385
150 risen nearly so fast (up 22%.) San Diego County could
grow quickly oversupplied at this rate.
300
254
232 100
212
189 203
200 172 178 178
170 163

50
100

0 0
2009/03 2009/04 2009/05 2009/06 2009/07 2009/08 2009/09 2009/10 2009/11 2009/12 2010/01 2010/02

New Listings 170 163 172 178 189 203 232 254 212 178 385 461
Listings Absorbed 113 111 126 138 128 139 150 132 106 106 118 135

Listings Sold by Calendar Quarter

All residential properties in SANDICOR MLS
9 quarters List Price Range (From $1,000,000 to $1,999,999) through December 31, 2009
Listings Sold, 9 Calendar Quarters through December 31, 2009
$1,000,000 - $1,999,999
Average Sale Price (Thousands)

$1,600
Homes Sold

500
Homes priced $1 million to $1,999,999 traded in a
Avg Sale Price Listings Sold Units tight range throughout 2009. Inventories hit bottom in
405

$1,200
400
Q1 2009, rose in Q2 and Q3, to ease once again by Q4
332
373
302
300
2009.
265
$800 267 229 273
174 200

$400 $1,300 $1,306 $1,263 $1,252 $1,224 $1,274 $1,253 $1,279 $1,259
100
1-year avg. price trend: Up 2.9 % 1-year sales trend: Up 19.2 %
2-year avg. price trend: Down 3.1 % 2-year sales trend: Down 17.8 %

$0 0
2007/4 2008/1 2008/2 2008/3 2008/4 2009/1 2009/2 2009/3 2009/4

Based on data supplied by SANDICOR Multiple Listing Service and its member Associations of REALTORS, who are not responsible for its accuracy.
Analysis dates are October 1, 2007 through December 31, 2009. Does not reflect all activity in the market place. Copyright © 2010, Real Data Strategies, Inc. All rights reserved.

Listings Sold by Calendar Quarter

All residential properties in SANDICOR MLS
9 quarters List Price Range (From $2,000,000 to $2,999,999) through December 31, 2009
Listings Sold, 9 Calendar Quarters through December31, 2009
$2,000,000 - $2,999,999
Average Sale Price (Thousands) Homes Sold

$3,000 100
Prices in homes sold between $2 million and $2,999,999
85
82
Avg Sale Price Listings Sold Units were down 6% in 2009, but sales volume improved on
79
75
softer prices.
63
$2,000
60 58
53 51
50
35
$1,000

$2,364 $2,307 $2,334 $2,214 $2,272 $2,201 $2,182 $2,212 $2,137

25

1-year avg. price trend: Down 6 % 1-year sales trend: Up 9.4 %

2-year avg. price trend: Down 9.6 % 2-year sales trend: Down 26.6 %

$0 0
2007/4 2008/1 2008/2 2008/3 2008/4 2009/1 2009/2 2009/3 2009/4

Based on data supplied by SANDICOR Multiple Listing Service and its member Associations of REALTORS, who are not responsible for its accuracy.

Listings Sold by Calendar Quarter

Analysis dates are October 1, 2007 through December 31, 2009. Does not reflect all activity in the market place. Copyright © 2010, Real Data Strategies, Inc. All rights reserved.

All residential properties in SANDICOR MLS

9 quarters List Price Range (From $3,000,000 to $3,999,999) through December 31, 2009
Listings Sold, 9 Calendar Quarters through December 31, 2009
$3,000,000 - $3,999,999
Average Sale Price (Thousands) Homes Sold

$4,000 40
38
Avg Sale Price Listings Sold Units
After hitting bottom in Q1 2009, both sales prices and
32
volume rebounded by the end of 2009 in $3 million to
$3,000 30
28
$3,999,999 homes. Two-year price trends show prices
23

20 19
are firm, but sales volume remains under that of 2007
$2,000 20
20 17
and 2008.
$3,218 $3,400 $3,272 $3,010 $3,104 $3,280 $3,177
$3,231 $3,147
8
$1,000 10

1-year avg. price trend: Down 2.9 % 1-year sales trend: Up 15 %

2-year avg. price trend: Down 1.3 % 2-year sales trend: Down 28.1 %

$0 0
2007/4 2008/1 2008/2 2008/3 2008/4 2009/1 2009/2 2009/3 2009/4

Based on data supplied by SANDICOR Multiple Listing Service and its member Associations of REALTORS, who are not responsible for its accuracy.
Analysis dates are October 1, 2007 through December 31, 2009. Does not reflect all activity in the market place. Copyright © 2010, Real Data Strategies, Inc. All rights reserved.
 Listings Sold by Calendar Quarter
All residential properties in SANDICOR MLS
9 quarters List Price Range (From $4,000,000 to $4,999,999) through December 31, 2009
Listings Sold, 9 Calendar Quarters through December 31, 2009
$4,000,000 - $4,999,999
Average Sale Price (Thousands) Homes Sold

$5,000 14
Avg Sale Price Listings Sold Units
Sales volume suddenly plummeted in Q4 2009 for
12 12
$4,000
10
homes priced $4 million to $4,999,999, but the year’s
10
9
average was better than it was in 2008. One sold unit
$3,000 8
8
7
isn’t enough to determine true price trends.
6
$2,000 5 5
4
4
$4,207 $4,050 $3,970 $4,077 $3,924 $3,993 $3,988 $4,102 $4,450
$1,000

1-year avg. price trend: Up 13.4 % 1-year sales trend: Down 88.9 % 2
1
2-year avg. price trend: Up 5.8 % 2-year sales trend: Down 80 %

$0 0
2007/4 2008/1 2008/2 2008/3 2008/4 2009/1 2009/2 2009/3 2009/4

Based on data supplied by SANDICOR Multiple Listing Service and its member Associations of REALTORS, who are not responsible for its accuracy.
Analysis dates are October 1, 2007 through December 31, 2009. Does not reflect all activity in the market place. Copyright © 2010, Real Data Strategies, Inc. All rights reserved.

Listings Sold by Calendar Quarter

All residential properties in SANDICOR MLS
9 quarters List Price Range (From $5,000,000 to $5,999,999) through December 31, 2009
Listings Sold, 9 Calendar Quarters through December 31, 2009
$5,000,000 - $5,999,999
Average Sale Price (Thousands) Homes Sold

$6,000 8

7 7 Avg Sale Price Listings Sold Units

After hitting bottom in Q2 2009, sales volume in
$5,000

6 homes priced $5 million to $5,999,999 improved for

5 5 5
$4,000
the remainder of the year. Prices also were at their
$3,000
$4,840 $4,995 $4,996 $4,966 $5,034 $4,933 $4,300 $5,125 $5,075 4 lowest in Q2 2009.
3 3
$2,000
2
2
$1,000 1
1-year avg. price trend: Up 0.8 % 1-year sales trend: Down 40 %
2-year avg. price trend: Up 4.9 % 2-year sales trend: Down 57.1 %

$0 0
2007/4 2008/1 2008/2 2008/3 2008/4 2009/1 2009/2 2009/3 2009/4

Based on data supplied by SANDICOR Multiple Listing Service and its member Associations of REALTORS, who are not responsible for its accuracy.
Listings Sold
Analysis dates are Octoberby Calendar
1, 2007 through DecemberQuarter
31, 2009. Does not reflect all activity in the market place. Copyright © 2010, Real Data Strategies, Inc. All rights reserved.

All residential properties in SANDICOR MLS

9 quarters List Price Range (From $6,000,000 to $6,999,999) through December 31, 2009
Listings Sold, 9 Calendar Quarters through December 31, 2009
$6,000,000 - $6,999,999
Average Sale Price (Thousands) Homes Sold

$7,000 6

$6,000
Avg Sale Price Listings Sold Units In homes priced $6 million to $6,999,999, the sale of
5

$5,000 4
one or two units can swing averages greatly, but sales
4
4
prices and volume were obviously down for 2009.
$4,000
3

$3,000 $5,966 $6,013 $6,084 $5,592 $5,838 $5,225 $6,080 $4,900 $4,925
2 2 2 2
$2,000
1 1

$1,000 1-year avg. price trend: Down 15.6 % 1-year sales trend: Down 50 %
2-year avg. price trend: Down 17.4 % 2-year sales trend: Up 0 %

$0 0
2007/4 2008/1 2008/2 2008/3 2008/4 2009/1 2009/2 2009/3 2009/4

Listings Sold by Based Calendar

on data supplied byQuarter
SANDICOR Multiple Listing Service and its member Associations of REALTORS, who are not responsible for its accuracy.
Analysis dates are October 1, 2007 through December 31, 2009. Does not reflect all activity in the market place. Copyright © 2010, Real Data Strategies, Inc. All rights reserved.
All residential properties in SANDICOR MLS
9 quarters List Price Range ($7 million and over) through December 31, 2009
Listings Sold, 9 Calendar Quarters through December 31, 2009
$7,000,000 and over
Average Sale Price (Thousands) Homes Sold

$14,000 9
Avg Sale Price Listings Sold Units 8
$12,000 Sales volume soared in homes priced $7 million
$10,000 7 7
6
and above in 2009, likely on attractive pricing, as
6

$8,000
5 5 5 evidenced by lower averages met in Q1 2009.
4
$6,000
$11,727 $11,264 $11,355 $11,534 $9,875 $7,133 $10,350 $8,400 $9,553
3
$4,000

2
$2,000 1-year avg. price trend: Down 3.3 % 1-year sales trend: Up 60 %
2-year avg. price trend: Down 18.5 % 2-year sales trend: Up 14.3 %

$0 0
2007/4 2008/1 2008/2 2008/3 2008/4 2009/1 2009/2 2009/3 2009/4

Based on data supplied by SANDICOR Multiple Listing Service and its member Associations of REALTORS, who are not responsible for its accuracy.
Analysis dates are October 1, 2007 through December 31, 2009. Does not reflect all activity in the market place. Copyright © 2010, Real Data Strategies, Inc. All rights reserved.

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