Not too many years ago, when Kris and I would take our daughters, Becky and Emily, on an occasional road trip vacation, their famous question was the age old, “Are we there yet?” That same question is also the most frequently asked question of us today, but not from the girls.
If I had to select one word to describe the 1st Quarter results for Scripps Ranch home sales, it might be “capitulation.” This is not necessarily a bad thing. We all know that for the market to reach equilibrium and stability there needs to be a bottom. I’m not suggesting we are there yet but it’s starting to feel close. Here is the summary of the market performance in March and the Q1 (as always, from the SANDICOR Multiple Listing Service for 92131):
Sales: There were 19 sales in March, a 70% increase from the dismal 12 sales in February. But this also represented a 35% drop in sales as compared to March, ’07.
Prices: The average sale price was approximately $750,000 or $288/foot. Measured against last month, the average sale price is about 2% less, but the average price/foot jumped about 8%. Measured against March, ’07, the average price per foot is down almost 15%. That’s significant.
1st Quarter ’08 vs. ’07
Sales were down 38% from the same period last year. The average sale price for 2008 is $735,577, down 7% from Q1 last year and price per foot was down about 11%.
We’re Almost There
What will be critical and most revealing is what happens in Q2 and Q3 this year. There are several factors coming into play that could accelerate the market out of the current doldrums.
It’s an election year and there is no better motivator for our legislators in Washington D. C. than job security. Although most of the results will be more noise and less substance, the cumulative effect of throwing so much crap against the wall may start to show results.
Exhibit “A” – What should substantively help is the higher conforming loan limits (now $697,500 for San Diego County) and the FHA participation;
Exhibit “B” – Buyers are starting to see value and are coming off the sidelines. At one recent open house we held, there were more than 30 groups through. That property sold in three weeks with multiple offers. Another one of our recent listings sold in two weeks, again with multiple offers and our most recent listing sold in one day with multiple offers. So the question is, are we just that good or is this a trend?
As I used to tell the girls, “We’re almost there.” Now, the real question is, “Where is there?”