April 2, 2006


With more condos on the market in central San Diego and appreciation flattening, boom appears to be slowing


During San Diego's six-year housing boom, few neighborhoods have been more exuberant than downtown.


Construction of sleek condo towers tripled the housing stock. The number of people living downtown more than doubled to 30,000. And median prices soared even higher than for the county overall.


It's a remarkable urban success story ? countering Southern California's reputation as the epicenter of tract home sprawl. At its most frenzied, the city's core resembled a boom town, its skyline filled with construction cranes and condo sellers booking heady profits. An 11th-floor unit in Little Italy's La Vita purchased for $423,000 early last year was sold four months later for $630,000.


Today, rising interest rates and sky-high prices have sobered the housing market countywide, with sales declining and appreciation flattening.


Downtown is mostly following the trend. An unprecedented number of previously owned condos ? about 600 ? are for sale downtown, roughly double the number at this time last year. Moreover, 2,010 unsold new units are being actively marketed in projects that recently finished, are under construction or are expected to start construction soon.


Property values have stalled overall. The median price per square foot for resale condos downtown rose just $2 last year to $503, a 0.4 percent gain. Countywide, the median price per square foot rose $32 to $343 ? a 10 percent gain, according to La Jolla-based market researcher DataQuick.




April 20, 2006

'Easy money' brought a surge of new, inexperienced real estate agents; committed veterans see a slowing marketplace favoring their knowledgeable ways


April 23, 2006


As San Diego's once-broiling real estate market cools and inventories of unsold properties grow, veteran agents expect real estate rookies to start looking for easier ways to make a living.


With interest rates at historical lows and annual home appreciation rates exceeding 20 percent, there was no shortage of buyers during the headiest days of the housing boom. The ability to obtain a seller's license quickly and without extensive training made the profession especially attractive. Some online schools offered ?crash courses? to help aspiring agents pass state license exams.


In June 2004, it took an average of 25 days to sell a single-family home within San Diego county. Today, it typically takes more than 60. According to the San Diego Association of Realtors, the county's inventory of homes listed for sale was 6,657 in June 2004, when the boom market was still at its peak. Recently, the county inventory topped 17,000 dwellings.


Big paydays are still possible in San Diego, even as the pace of sales slows. Most economists say the housing market is headed for a ?soft landing,? in which monthly gains in appreciation diminish but most properties hold their value.


In 2004, during the zenith of San Diego County's real estate boom, monthly year-over-year gains in appreciation often exceeded 20 percent. The overall median price for all homes sold in March 2006 was $504,000, a 5.7 percent rise over March 2005 and a small increase over February's median of $502,000.


The completion of the first quarter of 2006 also marked the 21st consecutive month in which sales volumes were down on a year-over-year basis, DataQuick Information Systems reported.


Enthusiasm for the real estate profession remains high. In San Diego County, membership in the association of Realtors soared from 8,702 to 18,828 between 2000 and 2005. Statewide, about a third of residential sales agents belong to the Realtor group.


The rule of thumb long has been a 6 percent commission on home sales. Discount brokers who help clients sell their own homes have placed a downward pressure on commissions, however.


Despite the costs and uncertainties of the business, real estate remains an attractive profession. Louis A. Galuppo, director of the Burnham-Moores Center for Real Estate at USD says good agents will always be able to make a living in San Diego County.


Most buyers don't have ?the time and inclination to understand all the different requirements,? the broker said. ?You have to coordinate the termite reports. You have lending, title and escrow. More laws are coming out all the time. I would not sell my own house without using a real estate agent.




April 25, 2006

April 21, 2006


Rates on 30-year, fixed-rate mortgages rose to 6.53 percent from 6.49 percent last week, Freddie Mac reported. This week's rate was the highest since the week ending July 12, 2002, when 30-year mortgage rates stood at 6.54 percent.


Rates on 15-year, fixed-rate mortgages climbed to 6.17 percent from 6.14 percent. One-year adjustable rate mortgages increased to 5.63 percent from 5.61 percent. Rates on five-year, hybrid adjustable-rate rose to 6.16 percent this week from 6.13 percent.


The mortgage rates do not include add-on fees known as points. Thirty-year mortgages carried an average nationwide fee of 0.6 point. Fifteen-year mortgages had a fee of 0.5 point, one-year ARMs carried a fee of 0.9 point and five-year ARMs had a fee of 0.8 point.




April 25, 2006

April 24, 20066

A Burnham Real Estate report says the average price of an apartment unit was $177,189 -- up 6 percent from 2004 and 143 percent since 2001.


George Carlson, a Burnham apartment specialist, said the flood of condominium conversions, which actually began to taper off as the year drew to a close, had the effect of driving the apartment prices to record levels.


While prices have been climbing, the rate of increase has tapered, mirroring what has been happening in the home resale market.


The Burnham report shows that the 6 percent increase in the average countywide price per unit in 2005 compares to a 35 percent increase in 2004 to $166,153 per unit, a 21.2 percent increase in 2003 to $123,152 per unit, and a 40 percent increase in 2002 to $101,544 per unit.


The report also shows that while the average countywide price per unit reached a new all-time high in 2005, the average per-unit price within the city of San Diego fell slightly, from $195,067 in 2004 to $192,765 in 2005.


Carlson likened what is happening now to what occurred after the run-up in per-unit prices in 1989 and 1990.


But Carlson also noted that the market climate today is very different than the early 1990s when cap rates approximated 8 percent with interest rates in the 8 percent to 9 percent range, resulting in poor cash flows given the high sales prices.


In the county of San Diego, Carlsbad reported the highest price increase, up some 94 percent to $276,734 per unit. It should be noted here that the spike had more to do with the projects being sold than significant price increases.


The community reporting the highest average per-unit price was Coronado, at $340,580 at the end of last year -- up 20 percent from 2004's $283,646 average price per unit.


Investors who don't intend to convert look to strong rent growth to keep their projects profitable. Although rents like per-unit sales prices have continued to hit record levels, here again, the rate of rent increase has slowed. MarketPointe Realty Advisors reported the average monthly rate for an apartment in the county in March was $1,211, or only $41 more than a year earlier. MarketPointe placed the average apartment vacancy at 3.05 percent.




April 29, 2006

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