Since the beginning of the year, San Diego has seen positive gains in both its home prices and sales numbers just about every month. The market here has, for the most part, climbed its way back to pre-recession levels. However, for the first time in months, home prices and sales in San Diego County are showing signs of slipping.
According to reports released by DataQuick last Thursday, the number of homes sold and their average sales prices both fell from July to August. The median price for home sales in August was $415,000, which is down from $417,000 in July. Obviously that’s a pretty small drop, especially when you consider that the market is still up 20.2% from last year.
The amount of home sales in San Diego was also lower, though that isn’t unusual for this time of year. There were 4,099 sales from July to August, which was down 9.5% from the month before. However, the overall total was still up 3% from August of 2012.
DataQuick President John Walsh said that these trends were pretty consistent throughout the Southern California Region. Walsh believes they reflect the fact that there are fewer cash-buyers and investors in what is still an inventory stressed market. “There’s something for everyone in today’s housing data,” Walsh said in a statement. “Sellers have seen an amazing price jump from just a year ago, allowing many to finally sell at a profit. As we head into fall and winter, a slower time of year, we’ll probably see year-over-year price gains continue to taper.”
Michael Lea, a real estate professor at San Diego State University, said while he wasn’t surprised by the drop in home prices, he was “a little puzzled” by the slowed rate of home sales. As Lea points out, many homeowners have left behind the years of thinking that their homes were going to be worth less than their mortgages. “I would have thought sales would be picking up,” he said.
Part of the reason for the drop in home sales in August is that many would-be sellers seem to be sitting on the sidelines waiting for prices to rise. Another hurdle has to to with mortgage financing. Lenders now require buyers to accumulate 10% to 20% of their down payment in addition to having a FICO score of at least 720. Both of those factors are higher than they were in the past, which is understandable considering the aftermath of the housing bubble.
While it may be difficult for some to get loans, if your finances are in order, now could be a great time to enter the market. According to Lea,“if you’re just an average guy that wants to buy a house,” it’s better to buy now. “I’ve been telling people this is a good time because interest rates aren’t going down.”