The LA Times reports on the San Diego numbers. “San Diego County kicked off California’s housing boom six years ago with dramatic price rises. Now it’s the first major California real estate market to see its median home price fall below year-earlier levels, according to data released Wednesday. Los Angeles County, saw home prices in June rise at their slowest year-over-year rate since 2001.”
“‘Does it mean we will continue to see weakening of the hot housing markets? It almost certainly does,’ said Raphael Bostic, an economist and professor at USC. ‘Does it mean that we will see massive declines and loss of values in these markets? No.’”
“Nonetheless, sellers such as Michael Pines are nervous. The professional real estate investor listed his Encinitas ocean-view home for sale at $1.3 million two weeks ago. But believing that the current downward trend will continue, he figures he may have to lower the San Diego County home’s price soon to close a deal.”
“In many ways, San Diego County has been ground zero for a nationwide debate about whether the housing market is in a speculative bubble. Over the last year, the county has exhibited many classic signs of a topped-out market.”
“It adds up to a change in the market that is giving prospective buyers the advantage, local real estate professionals say. Parham Firouzi, a La Jolla-based agent, said sellers were finding it harder to get their asking prices. Buyers, he said, ‘know what they want and what they are willing to pay.’”
“‘You know it’s a buyer’s market when your asking price doesn’t mean anything,’ he said.”
“San Diego County in particular has been an important and lucrative market for the mortgage industry’s peddling of unconventional loans. ‘People are realizing that they will have more mortgage than value in their house, and that’s making some hesitate,’ said William Hinck, a senior mortgage consultant in San Diego.”
The North County Times. “Economist Jack Kyser blamed part of the San Diego area’s housing woes on a rush to develop high-rise condominiums in downtown San Diego. ‘You have speculators. Are they going to be able to hold onto those units? Or they might have to sell them at a loss,’ said Kyser. ‘They’re out on a limb,’ he said. ‘Some are overleveraged using variable rate mortgages. And interest rates are going up.’”
The Union Tribune. “‘We are seeing an increase of inventories to normal levels, but it has dramatically changed the psychology of the market,’ said Leslie Appleton-Young, chief economist for the California Association of Realtors. ‘There is excess steam in the market created by three to four years of very rapid price appreciation,’ she said.”
“Pat and Sandra Daugherty have been trying to sell their Fletcher Hills home since February with no luck, despite lowering the price by more than $50,000. Currently out of work and eager to move to Colorado or Texas for a new job, Pat Daugherty fears he and his wife might lose money on the 2,000-square-foot home they bought two years ago for $540,000.”
“They’ve put roughly $75,000 in improvements into the house and have an asking price ranging from $635,000 to $675,000. ‘At this point, we’re willing to take a loss,’ said Daugherty. ‘We really need to get this off our back so we can get on with it. I’m obviously frustrated because we worked so long and hard on this, but sooner or later the prices had to back down.’”
“Dyann Reilly has been struggling to sell her two-story, 2,010-square-foot downtown condo for a year while she lives in a one-story downtown unit that is more comfortable for her. She originally listed the condo she bought four years ago for $630,000 at $1.2 million but has since lowered the asking price to $900,000.”
“‘I think people who come downtown want a view, and I don’t have one,’ said Reilly. ‘I also think there are too many condos available.’”
“The segment of the housing market showing the biggest drop last month was new home sales, which saw prices decline 8 percent. That was influenced, in part, by a weakening demand for condo conversions. ‘Sales have slowed, concessions have increased, and prices have dropped fairly significantly,’ said Paul Kerr, a local condo converter. ‘Buyers are sitting on the sidelines waiting for a theoretical price reduction of 30 percent, and I don’t necessarily believe that’s going to happen.’”
Written By: Ben Jones @ 6:06 am Comments (106) |
