The average sales price of homes in San Diego climbed 21% from January, 2012 to December, 2012 from $395,000 to $481,000. This trend was a result of both a reduction in available homes for sale, inventory dropped 42% for the same period, as well as an improvement in the San Diego economy. While the San Diego economy is predicted to improve at a slow pace, the introduction of new buyers to the housing market appears to be growing at a much more rapid pace.
In February of 2012 I predicted that we had hit the bottom of the San Diego housing market and that sales prices and the number of homes sold would begin to improve. I was correct on the increase in average sales prices however I missed the mark with the number of homes sold. Inventory in San Diego dropped so dramatically that there simply weren’t enough homes available for sale to meet growing demands.
New construction is also lagging in San Diego. While permits for new construction have been increasing, the pace is very slow and actual housing starts are almost nonexistent. Builders are selling off standing inventories but newly built homes are not appearing at a pace necessary to satisfy the number of new buyers entering the market.
I have spoken to several home owners who are looking to Spring 2013 as the time to put their homes up for sale. I am hopeful that we will see some improvement in inventory soon to help with the pent-up demand for homes from new buyers.
As a REALTOR I think my business will improve this year but I am less than optimistic for my first-time home buyers.