I recently wrote what has become my annual summer refrain, warning that we should all brace ourselves for an expected August slow-down in market activity. And then, as if by cue, the phones started ringing. Everyone, it seemed, was suddenly interested in buyer or selling.
What do I know?
Maybe I was wrong. Or maybe I was right save this little blip in the local interest barometer. I will only know for sure when I am looking back through the changing leaves. (OK – Leaves don’t “change” in San Diego, but they do in some places, I am told.)
What I do know is that right now we are personally seeing a mini spike in interest levels among would-be home buyers and sellers. Too bad the sky is falling.
As reported in the San Diego Union-Tribune and on SignOnSanDiego:
County home prices will decline 9.6 percent in the first quarter of 2011 vs. the first quarter this year, says an analysis from Fiserv, which provides the data for the widely watched Case-Shiller Indexes.
What the analyst is really saying is that we giveth and we taketh away.
Still, Stiff tried to sound a slightly positive note. While a 9.6 drop sounds pretty nerve-racking, he said San Diego has already hit bottom. By his calculations, the prices of single-family homes hit their trough in the second quarter of 2009. Through the first quarter of this year, prices have increased by 11 percent so even with the projected decreases the region will be above the low, albeit by just a bit — between 1 percent and 2 percent.
On the one hand, I could point to Mr. Stiff’s remarks and say something cogent like, “Neener, neener. I told you so!” But a 10% do-over feels a smidge excessive (a “smidge” being roughly equivalent to 5 to 7%), even to a double-dip girl. The bigger point is that our market is volatile and will be for a while. On this point, you’ll get no argument from me.
The beauty of housing forecasts, and news in general, however, is that they are much like Zestimates. We tend to buy into them when they are convenient. For those who have had enough of this housing correction talk, Zillow’s COO Spencer Rascoff provides the welcome news that San Diego prices have seen their trough and are back on the upswing. If you are short on time, hit this Fox Business video at the five-minute mark to cut straight to the part where the clouds part and the angels sing.
Our three readers know that I tend to be a student of the gut check, intuitive school of analysis. Accordingly, here is what I know from our market.
- The attached, condominium market is more sluggish than we have seen in a while. Prices have been affected since the tax credit spigot was turned off.
- Detached homes in the I-15 Corridor in the $400,000s (if you can find them) and $500,000s are drawing big crowds, as are detached homes in the $700,000 to $800,000 range.
- The tweeners and higher priced homes are most challenged when it comes to securing that coveted fully-executed purchase agreement.
- Buyers are picky. They still want a smoking deal or gold-plated perfection – or both – across all price points.
- Buyers are fickle. “Bounce rates” remain high and failed escrows are sadly commonplace, a result of a purchase agreement that tends to give buyers a lot of talk-back latitude and an environment of market uncertainty and shaky consumer confidence.
So, are we in for a 10% price slide in San Diego County? I don’t think so. Are we in for a couple of years more of this same wild ride? You betcha.