San Diego blazes new trail in housing slowdown
County's median up 2.1%; double digits seen elsewhere
By Roger M. Showley
UNION-TRIBUNE STAFF WRITER
September 14, 2005
San Diego County, which set the pace for Southern California's rapid climb in home prices, could be leading the region in a slowing of appreciation that has brought prices to just above last year's levels.
La Jolla-based DataQuick Information Systems reported yesterday that the county's median home price of $493,000 last month was only 2.1 percent higher than it was a year ago.
Graphics
San Diego County
home prices
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Leading a slowdown: Regional home prices
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Depreciating ZIP codes in San Diego County
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In contrast, the region's five other counties each posted double-digit price increases from August of last year. Los Angeles County's median sales price, for example, increased 21.4 percent, while Riverside County had a 16.2 percent increase and Orange County was up 13.6 percent.
Last month's sales in San Diego County continued a 14-month slowdown, DataQuick's report showed. There were 5,379 transactions last month, down 3.6 percent from August 2004. The highest sales count in this cycle was reached in June 2004 when 6,208 sales were recorded.
DataQuick analyst John Karevoll said San Diego County, which had posted year-over-year increases of 20 percent or higher through last year, is blazing a path that other markets soon are likely to follow.
"They're due for a decline in appreciation rate," he said. "It's just that San Diego is anywhere from six months to a year ahead of the rest of the region."
The slowdown is not uniform across the county. Encinitas, Tierrasanta and National City are among the areas that posted increases of more than 30 percent on single-family resale homes.
Other areas, such as Kensington and Mission Hills, turned in prices that were more than 10 percent below last year's levels. Sixteen ZIP codes recorded lower median prices than in August 2004.
The market is giving Teresa Generas the jitters, causing her to pray for somebody to buy her 1931 Mission Revival bungalow, which has been on the market more than six months.
"It's getting a little bit scary right now," she said. "I'm not a person of means. I'm a retired nurse and a widow and I don't have millions to call upon."
Generas, 64, moved to a condo in Tierrasanta last spring and put a $1.1 million asking price on her 1,879-square-foot, three-bedroom home in Kensington. Since then, it's been in and out of escrow three times and is listed at $950,000 to $975,000.
Her son Tony is house-sitting and helping cover her two mortgage payments, which total $6,000 a month. But she's not ready to accept lowball offers.
"I just refuse to believe that there's been that much of a dip," she said.
Lowering the price more doesn't interest her. "I think people who can afford this house wouldn't care that much anyway," she said.
Generas' real estate agent, Beverly Olsen of UBN Realty, said three would-be buyers are waiting with offers but they must sell their homes first because Generas is not yet ready to accept a purchase offer with a contingency clause.
"I think it's taking people longer to make up their minds for expensive houses when it gets up toward a million," she said.
The San Diego Association of Realtors' numbers bear her out.
The average single-family resale home that sold last month took 51 days to enter escrow, up from 25 days in August 2004. The number of homes on the market is 14,273, compared with 10,161 a year ago.
However, Karen Peterson, last year's president of the realty association, said sellers shouldn't panic and buyers should not hesitate if they find what they want.
"I think we're still adjusting," Peterson said. "Last year was such a hot market."
She said that in a few cases buyers are outbidding each other. Areas where prices are down saw rapid increases earlier.
But the big bugaboo remains the anticipation that the proverbial real estate "bubble" will burst.
"People think prices are going to go down and the statistics keep telling us they're not," Peterson said. "They need to buy. We have an excellent inventory, excellent interest rates. What are they waiting for?"
DataQuick's Karevoll said real estate watchers are closely monitoring prices in San Diego County.
"San Diego is the county that is kind of the furthest off into this uncharted statistical territory, so everybody's wondering what is going to happen locally," Karevoll said. "The big question there is will prices decline significantly or will they flatten out."
One month's statistics don't make a trend, but over the past year, the county's market has moved in one direction – slowing appreciation.
From the peak increase of 26.4 percent posted year-over-year last October, appreciation has dropped steadily every month. The latest rate of increase was the lowest since April 1999, when the median stood at $196,000.
The median, which represents the midpoint of all sales, with half above and half below that figure, varies widely throughout the county and within ZIP codes, depending on the size and age of a home and other factors.
For single-family resale homes in August, the median was down $5,000 from July's record of $560,000. But it was still $30,000 higher than a year ago. Resale condos posted a median of $395,000, down from the July record of $398,250 but up from August 2004's $367,000.
Newly constructed homes and condo conversions, which are reported together, increased from $445,750 in July to $460,500 in August, but that figure wasfar below the record of $530,000 set last November.
The rise of lower-priced condo conversions has been cited by many analysts as the reason that the new-home category's median has dropped.
Local multiple-listing service Sandicor Inc. reported an August median of $525,000, up 6.7 percent from August 2004. Sales recorded by Sandicor represent about 60 percent of the local market.
Industry watchers report no signs that Hurricane Katrina has had an effect on the local market, because relatively few Gulf Coast residents have moved here and even fewer are expected to buy a home immediately.
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Roger M. Showley: (619) 293-1286; roger.showley@uniontrib.com
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