The 2012 top real estate trends in San Diego County
As the housing market began to rebound from the recession, 2012 turned out to be an interesting year for real estate in San Diego. While some trends functioned as anticipated, others surprised real estate experts in southern California and around the country.
Home prices increased during the year
Home prices in San Diego County have steadily increased over the past nine months, which is the second longest improvement of all housing markets across the country. According to the Union-Tribune, the median price of a home sold in November 2012 was approximately 14 percent higher than the same time last year. At $358,000, the home price showed a stronger increase at the end of the year than experts could have anticipated. The San Diego real estate community saw the data favorably, as both sellers and competitive buyers can benefit from the prosperous housing market.
The increasing housing prices in San Diego play into a larger trend being seen the U.S. economy.
“Higher year-over-year price gains plus strong performances in the southwest and California, regions that suffered during the housing bust, confirm that housing is now contributing to the economy,” said David Blitzer, chair of the S&P Down Jones Indices index committee. “Last week’s final revision to third quarter GDP growth showed that housing represented 10 percent of the growth while accounting for less than 3 percent of GDP.”
Home sales remained competitive in the fall and winter months
Although the housing market tends to cool off during the fall and winter seasons, trends in San Diego show that homebuyers were just as driven during these times of year as they were in the more popular real estate season. It is usually the local investors who fuel the market during these months, but in 2012, prospective buyers expressed the demand for real estate as well.
Record low mortgage rates
Although mortgage rates were once between 13 and 18 percent for a 30-year fixed home loan, rates in San Diego have now fallen below 4 percent. According to the Union-Tribune, the November mortgage rates were the lowest recorded in more than 30 years. Experts attribute the drop to the Federal Reserve’s promise to buy mortgage-backed securities to help improve the national economy. In September, chairman Ben Bernanke announced the stimulus plan and anticipates that the buy-backs will spur continued growth in the housing market. The Federal Reserve’s plan will help keep mortgage and long-term interest rates down, and allow more people to buy or refinance their homes and existing loans.
“I think that housing prices are beginning to rise in some markets, which will encourage people to look at homes, will encourage lenders to make mortgage loans,” Bernanke said. “So I’m hopeful that we’ll see continued progress in the housing market; that has been one of the missing pistons in the engine here.”
Lower numbers of home listings
Although real estate conditions are improving, people looking for homes for sale in San Diego have noticed that there are not as many properties available as there were in previous years. According to the Union Tribune, there are approximately 5,300 listings in San Diego County, which adds up to about half of what was available in the previous year. With price points growing higher and higher, inventory has continued to fall over the past 15 months. Many homeowners who would want to put their properties on the market are unable to because they are behind on their mortgages and need to wait for even higher prices.
“We need a continued rise in prices,” Michael Lea, professor at the San Diego State University center for real estate, told the Union Tribune. “It’s the most healthy thing that can happen. It will move more and more people out of negative equity and then it will start to revitalize the trade-up market, which has been moribund.”