Price gains make for a hot housing market in San Diego

People looking at homes for sale in San Diego will not find themselves alone in their quest. Recent reports have indicated that real estate is heating up as many buyers flock to the market and home prices continue to climb.

"Someone blew the dog whistle that only homebuyers can hear: Almost as a body, prospective buyers have rushed into the North San Diego and Southwest Riverside county housing markets, extending the summer buying season into the normally sleepy autumn, real estate agents said," journalist Eric Wolff wrote in his recent article for the North County Times.

The source indicated that mortgage rates, which have hovered around 4 percent and historic lows, as well as reasonably low house prices have prompted many buyers to reenter the market over the last two years. However, many individuals held back from entering the market based on the belief that prices would fall even lower. This year marked a change as those buyers who had held out developed the belief that prices had finally reached bottom and it was time to buy.

The North County Times reported that this year's prices convinced many homeowners to hold on to their homes and not to list them for sale, as they were faced with prices that are lower than their mortgage balances. This fact contributed to the housing market recovery; however, a shortage of inventory spurred an increase in home prices and forced buyers to act quickly. The source cited economists who maintain that inventories above six months typically indicate falling prices, while inventories below three months usually suggest that home prices will rise.

Local Fox affiliate KSWB recently cited an industry report which indicated that the median price of single-family homes sold in September increased by 3 percent over August, at $405,000 in September while August saw a median price of $392,250. September's median home price was 12 percent higher than September 2011. The median sales price for condos and townhomes was at $240,000 in September, which is consistent with August but up by 16 percent over September 2011. The report also indicated that while listings that sold dropped in number from September to August, sales were up 10 percent year-over-year.

"I think the buying community has awakened to the fact that interest rates are going to stay fairly low … and there's more confidence in the economy," real estate expert Jerry Kalman told the Times.