May 26, 2006


With new home construction declining and sales slowing, the predicted 2006 housing market slowdown in San Diego County is very real according to the Sullivan Group Real Estate Advisors, who spoke as part of a housing seminar this month.


For the first quarter of 2006 new and existing home sales activity is down by 30 to 60 percent when compared to the first quarter of 2005, according to Peter Dennehy, senior vice president with the Sullivan Group.


Employment growth in the county has been accelerating since the summer of 2003, Dennehy said, citing a 1 to 1.5 percent increase in job growth for this year. In a different seminar in November 2005 he predicted 30,000 new jobs in 2006.


While local economic fundamentals are positive, that is not carrying over to housing as buyers are sitting on the fence watching how the market will react following a period (2005) that experienced the second most home sales in history.


Housing appreciation, similar to amount of sales has also declined.


The decline in appreciation rates and amount of sales equates to increased inventory and time on the market.


At the end of the first quarter the average days on the market for a home was 56 days, which according to Sullivan is not terrible, as even 60 to 70 days on the market is considered healthy. He said a key to selling homes in this type of market, from a builder or developer's standpoint, is differentiation through location or design.


While the San Diego market is on a decline Sullivan reminded the attendees that the market is cyclical and perspective is key, as average inventory and time on the market figures are still below historical averages. Additionally the unemployment rate is below the average of five percent and interest rates remain historically low.




May 27, 2006

May 26, 2006











The median price of an existing, single-family home in the San Diego area fell slightly last month, and sales were down 27 percent compared to the same period last year, a real estate group reported Thursday.





The median price of a home in San Diego stood at $601,070, compared to $607,370 the previous month and $593,600 in the year-ago period, according to the Los Angeles-based California Association of Realtors.





Home sales in the region were down 9.8 percent from the previous month, and down 27.1 percent from a year ago, according to CAR.





Statewide, the median price of an existing, single-family detached home in April was $562,380, relatively unchanged from the $562,630 in March, but up 10.2 percent from the $510,400 in the year-ago period.





Statewide, sales decreased 21.4 percent compared with the same period a year ago, according to CAR's report.





"Sales fell this year compared with April 2005 when they hit the second-highest monthly pace on record," said CAR President Vince Malta.





"Concerns about the likelihood of future interest rate increases continue to influence the market," he said. "While still near their historic lows, mortgage interest rates are at their highest level since June 2002 for fixed-rate mortgages, and August 2001 for adjustable-rate mortgages."





In a separate report covering more localized statistics generated by CAR and DataQuick Information Systems, 84.5 percent, or 339 out of 401 cities and communities, showed an increase in their respective median home prices from a year ago.













May 27, 2006

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