San Diego home sales, prices and demand for homes soar

People looking at real estate in San Diego have likely heard a good deal of positive news about recent market conditions. On the heels of a major industry report earlier this week, comes another report from real estate information service DataQuick on November 13, which indicated a rise in San Diego home sales and median price.

DataQuick reported that a total of 3,622 homes were sold in San Diego County in October. Compared to the 2,759 homes that were sold in October 2011, this is a 31.3 percent increase. The report additionally found that in October, the median home price for the county was $350,000. This is up 11.1 percent from October 2011.

"Watching the market rebalance itself is fascinating," said DataQuick president John Walsh, according to KPBS. "In some categories and in some neighborhoods, demand outstrips supply, pushing up prices. In other areas, the market is still largely dormant. Low interest rates are a huge factor, where mortgages are available, which they aren't for a lot of potential buyers."

San Diego and the 'Foreclosure Discount'
In a recent article in The Wall Street Journal, author Nick Timiraos explained that the strong turnaround being observed for home prices in numerous housing markets this year can be partially explained by what is described as the "Foreclosure Discount."

"Foreclosures have accounted for a shrinking share of home sales in more markets over the past year, and this also helps explain why prices are doing better," wrote Timiraos. "Home prices are rising, consequently, because there are fewer foreclosures selling as a share of total sales, and those foreclosed properties are also trading at less of a discount than they were one year ago."

The source detailed the Sunbelt markets that have observed a high demand for affordable properties as including Riverside, Calif. (1.8 percent); San Diego (2.4 percent); Miami (2.9 percent); Los Angeles (4.2 percent) and San Francisco (4.7 percent).

A recent article in the San Diego Union-Tribune also attributed the rise in home prices being observed throughout southern California to the fall in the area's share of foreclosures. The source cited DataQuick numbers showing that foreclosure resales made up 16.3 percent of the Southern California resale market in October, which is down from 16.6 percent in September 2012 and 32.8 percent less than October 2011.

Consistently strong demand for homes through the fall season
A recent article published in the North County Times commented on the strength of homebuying activity in San Diego in the fall season. The market activity was unexpected because the fall season usually brings with it a substantial drop in sales.

Real estate journalist Lily Leung cited the most recent DataQuick report, and further revealed that the median home price in October remained at a four-year high. During the last nine months, San Diego home prices have either risen or stayed consistent without dropping.

Leung revealed that the areas that observed the most significant increase were Tierrasanta, a neighborhood in central San Diego, and Julian, a neighborhood located in North County. These two areas are both observing median prices that are at the first-time homebuyer level. Tierrasanta's median home price was $350,000, while Julian's median home price was $169,500. Sales are additionally picking up steam in the San Diego County areas where the median price is at the "move-up buyer range" of $400,000 or more. The source revealed that northwest Carlsbad and western Escondido are the areas that observed the most significant sales growth over last year.