People are always talking about how many foreclosures there are and how many short sales there are in San Diego. The problem with that though, is that most people don’t know what they’re talking about. I don’t mean that in a rude way, but the truth is that only a small percentage of people are actively trying to buy or sell real estate and most people don’t know what’s really going on. Looking at the first three quarters for the last three years, we can see a pretty clear trend in the downtown San Diego real estate market.
Less Distressed Sales
In 2011, there were 186 closed short sales by the end of the third quarter in downtown San Diego. This year, there have been only 137 short sales, which is a 26.3% decrease in short sales. The number of foreclosures (REOs), has also dropped, going from 161 in 2010, to 132 last year (an 18% drop), to 55 this year – 65.8% less REOs in just two years! I think this is mostly due to the fact that banks are more cooperative with sellers who want to complete a short sale. The good news is that with less distressed sales, the market has finally corrected itself and we aren’t seeing prices continue to fall.
The last condo building to be built in downtown San Diego was Bosa’s Bayside at the Embarcadero – that was in 2009. Since then, buildings like Bayside, Sapphire Tower, Electra, Smart Corner and all the other “new” buildings” have pretty much sold off all their new inventory. This is great for existing home owners since they no longer have to compete with the developers slashing their prices, or the extra supply of inventory.
In 2010, there were 345 developer condo sales in by the end of the third quarter. This number dropped 44.9% in 2011 and fell another 22.6% this year. This decrease has been mirrored by the increased number of resales downtown, rising 48.6% from 2010 to 2011 and another 35.9% increase this year. And with no new inventory for at least three years, homeowners are in a great position to sell.
In the third quarter of 2012, 47% of all 92101 purchases have been in cash. Typically this is a good sign that the market is doing well and that investors are confident in the real estate market. These cash buyers aren’t new to San Diego’s real estate market though, as we’ve seen as much as 50% of transactions being in done with cash.
Although inventory has picked up a bit this year, with 189 active listings (as of 10/17/12), I’d hardly say there’s a lot for sale. The lack of inventory has created a lot of pressure on buyers to put their best foot forward and multiple offers are more common than not – just make sure you pick a realtor that will market your home correctly. Comparing the third quarter of 2012, we can see a slight increase in resales, relative to the first three quarters – 58% for Q3 and 55.6% for the first three quarters’ sales. REOs counted for only 3% of all Q3 sales downtown, while REOs contributed to more than 7% of all sales in the first three quarters.
Buy and sell now. Use Denny Oh to do it. The end. Thanks.