According to the Union Tribune, San Diego’s housing market may be on the rebound. According to a UT article last week, San Diego’s median home price has risen “for the third consecutive month in June, hitting $314,250.” Luckily for all you buyers, this is still well below the $517,500 high point back in November of 2005, but how long will this last?
According to article, the new median home price is almost 11% higher than the $280K low, set just a few months ago. Has San Diego’s real estate market passed it bottom? Keep in mind, the last time the median home price is San Diego was near $300K was back in 2001…8 years ago! Today, I’m seeing a lot more buyers in the market, spanning all price points and all types of homes – from 500 sqft studios, to 5 bedroom homes in Rancho Bernardo, to 3 bedroom condos in Pacific Beach, to $2 million dollar penthouses in downtown San Diego. I’m also seeing a lot more investors, who are looking to take advantage of a down market, before it gets saturated with buyers.
The information the UT quoted was provided by RealtyTrac and DataQuick, who are well known real estate advisors in the area. Senior vice president of RealtyTrac, Rick Sharga, said that “three straight months of price gains is significant, even if it’s too early to proclaim a recovery.” As I’ve always said, you won’t be able to identify the bottom until it’s already passed. Have we passed it though? Probably not completely.
I do think we’ll see some price drops, but we’ll also see some more activity at the higher end of the market, brining averages and median price points up. The high end market was dead for a while, but we’re seeing a lot more activity now. Today you can get a jumbo loan(anything over $697,500) with 20% down at about 5.75%, whereas a year ago, you’d be paying about 8–9% interest. I also think that summer has brought more mid range buyers into the market, as families who want to upsize are able to move with their kids being on vacation.
According to the article, there were 3,692 home sales last month(June 2009), which was 14% more than in May and 20% more than June of 2008. Clearly things are getting better and buyers have more confidence. I do think prices will come down a bit more, but we’re definitely close to the bottom and who knows, I could even be wrong and we’ve passed the bottom!