Home prices reach all-time high
By: DAVE DOWNEY - Staff Writer
NORTH COUNTY ---- Defying buyer expectations that housing costs would level off and perhaps even slide down a tad, the median price for a single-family home in North County rose 4 percent in May over prices last year and reached a new all-time high of $645,000, the North San Diego County Association of Realtors reported Friday.
The new high slightly exceeded the previous mark of $644,899 set in November, and compared to a single-family median of $620,000 in May 2005, the report showed. <chart align=center>
"We are not seeing the type of double-digit growth we had in the past, but we are still seeing a solid market," said Paul Cauci, spokesman for the North San Diego County Association of Realtors.
More in line with expectations, the median price for condominiums did slide down a bit last month ---- by 3 percent year over year ---- in landing at $387,500. That compared to $400,000 a year earlier.
At the same time, sales continued to fall sharply across the board in North County and the inventory of unsold homes on the market has now reached an all-time high for the county as a whole.
"It is a little surprising to see the detached houses continue to go up," said Carlsbad real estate agent Dennis Smith. "It really does surprise me quite a bit because we are seeing a lot of downward pressure. A lot of buyers are saying, 'Why should I pay full price?' "
And buyers are making low-ball offers, Smith said. But, so far, most sellers aren't biting, he said.
As a result, prices are staying high and even edging up for the relatively few properties changing hands.
Every month so far this year, home sales have fallen sharply all over San Diego County, according to Sandicor Inc., a multiple listing service. Sales declined 18 percent year over year in January, 17 percent in February, 16 percent in March and 34 percent in April.
Sales have declined every month in North County, too. And in May, the single-family sales total of 833 was 22 percent off the May 2005 pace of 1,063 homes, according to the association. North County condo sales, totaling 370 last month, were off 10 percent from 411 in May 2005.
Earlier in the year, some real estate analysts expressed optimism that a busy spring would eclipse concerns about sharp year-over-year sales declines during winter. Instead, the trend has continued and the inventory of unsold homes on the market reached 8,503 in North County at the end of May, the association reported.
Given the area's total sales of 1,203 detached and attached homes, North County in effect has a seven-month supply of homes, up from six months as of March. Even if no new homes were to come on the market in June, it would take seven months to exhaust the area's supply.
Countywide, the inventory had reached 19,674 as of 3 p.m. Friday, a new all-time high that has eclipsed a previous mark set 11 years ago during the recession, Smith said. And the number keeps rising by close to 50 homes a day.
"By the end of the month we should be over 20,000 properties," he said.
While economic experts suggest that the market cannot sustain its high prices indefinitely because wages have risen much more slowly in recent years, Smith said a sharp drop is unlikely because San Diego County and Southern California continue to enjoy strong, if slowing, job growth.
"Eventually, prices are going to have to come down some," he said. "What's ultimately going to happen is, some people are going to have to sell and they may begin to take lower prices."
Contact staff writer Dave Downey at (760) 740-5442 or ddowney@nctimes.com.
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