We have become a statistics based society. We are overrun by numbers. Lately, and for the past several years, few of the headline numbers have been very good. So as we close out the very difficult year of 2008, I’m going to try and brighten your day. This is not one of those “it’s a great time to buy” pitches. You know we don’t do that here. I will let the numbers speak for themselves.
From the California Association of Realtors (CAR)-
- Sales for October, 2008 were up 117.1% over last October.
- The median price fell almost 40% from last October.
- Current Inventory represents 5.9 months of absorption vs. last October when we had 15.2 months of standing inventory.
For San Diego:
- October, 2008 sales were up 131.6% from last October.
- Median sale prices fell 37.4%.
For Scripps Ranch (Detached homes only, data from SANDICOR):
- 3rd quarter sales were up almost 0.5% compared to the same period last year (as opposed to having fallen for more than two years).
- In October 2008, the median sales price was down only 1% from last October, but the median price per square foot, a more meaningful measure, dropped 9%.
- Currently there are 88 homes listed for sale, representing only 4.4 months of inventory.
Other Factors to consider:
- Bad news -The impact of the October stock and credit market meltdown, recession, etc. is not yet fully showing up in these numbers.
- Good news – Interest rates are at a multi-year low (5.25% for a 30-year fixed rate non-conforming, no point loan as of yesterday).
- Possible Good news – When it’s all added up, about $2 trillion is and will be pushed into many components of the economy over the next year or two.
The Bottom Line – Sales are up significantly in California and in San Diego, primarily driven by short sales and bank-owned properties. Prices have dropped precipitously from last year (on top of previous drops). Inventories are shrinking. Interest rates are back to historic lows. We are in a recession, but an extreme amount of monetary infusions are in progress and will continue over the next year (or two).
Almost seems like 1996-97, except on steroids. This is what I do know. In 1996, when few were buying homes, one of my clients purchased a 1,700 sq. ft. home in Scripps Ranch for $230,000. Two weeks ago, after three years of declining prices, he sold it for $585,000. Are we looking in the rear view mirror, yet?