More evidence poured in Tuesday to support the notion that the county’s housing market is recovering and will likely continue doing so throughout 2013.
At year’s end, local home prices hit their highest point in 4 1/2 years, based on the latest report from San Diego-based real estate tracker DataQuick.
The median price paid for a home sold in the county in December was $366,000, which was 2.2 percent higher than the previous month and 16.2 percent higher than the same time a year ago. The county’s most recent price peak was $370,000 in June 2008.
Total home sales also increased. There were 3,757 transactions last month, up by 11.5 percent from November and 13.5 percent from a year ago.
A higher-than-normal share of cash buyers and investors, as well as record-low interest rates, pushed the market toward levels of housing activity not normally seen in the fall and winter. Buyers and sellers tend to take a break for the holidays and resume in the spring.
“In 2011, the question was, ‘When should I buy?'” said Linda Lee, president of the San Diego Association of Realtors. “In 2012, it was: ‘What can I buy now? What should I buy?’ They’re no longer, ‘Should I buy?’ They’re now worried about how quickly they will be priced out.”
Prices have stayed flat or increased during the past 11 months, DataQuick numbers show. From start to finish in 2012, the median home sales price rose by 20 percent.
Another milestone: The December median price for sales of single-family homes, which make up the bulk of monthly transactions, almost cracked the $400,000 mark. The last time that happened was 4 1/2 years ago.
A major factor contributing to sustained price increases is lower-than-normal inventory. Roughly 4,100 listings are active on the market right now, which means it is a seller’s market. That’s the lowest number in at least 3 1/2 years and about half of the inventory the county saw last year.
Limited housing stock spurred a recurring theme in 2012: Prospective buyers in certain high-demand areas faced fierce competition and became tangled in multiple-bidding wars. They often faced off with cash buyers and investors, who have kept a prominent presence in the local market in the past two to three years.
More than 28 percent of December sales were completed by absentee buyers, many of them investors. That’s near the peak of 30.1 percent recorded last February.
Nearly one in three deals were done in cash. Last month’s percentage was near the high point of 33.5 percent, which was logged last May.
“We’ll keep seeing multiple offers unless inventory goes up to 15,000 or 20,000-plus, a stable market,” Lee said. “I’m looking at my board. there are 10 to 20 buyers, but I don’t have inventory for them. It’s sad.”
Lee, the real estate association president, said traditional homebuyers should expect to see continued competition with cash buyers and investors. She advises them to get preapproved with reputable lenders and work with real estate agents who have a strong history of success.
And buyers shouldn’t be afraid to tell sellers why they love the home they’re striving to purchase, Lee added.
“It’s real important to combine a family story,” she said. “How long have you been looking? … It may not be taken into consideration as strongly in a short sale, but it could be with a private seller.”
Throughout Southern California, activity among home buyers who wanted to move up in price became reinvigorated last year, according to DataQuick. Transactions between $300,000 and $800,000 rose by 31.4 percent when compared with the same period a year ago. The number of homes sold for $500,000 or more soared by 40 percent.
We saw similar numbers in San Diego County. Home sales between $300,000 and $800,000 shot up 34.9 percent. In the $800,000 and over range? They increased 38.4 percent.
Real estate professionals hope that continued price increases will spark more movement in the market, prompting people who are on the fence to sell — and thus give would-be buyers more choices.
“Last year should also be remembered as the year the move-up market awoke,” said DataQuick president John Walsh. “If these upward trends hold, which requires a sustained economic recovery, we should eventually see more inventory hit the market. More would-be sellers will be satisfied with what their homes can fetch, and fewer people will owe more than their homes are worth, freeing them up to move. The rise in inventory would at least tame price appreciation.”
Source: UTsandiego.com