San Diego County’s housing market is off to one of its slowest starts to peak buying season, which began in March.
Last month, 3,057 homes sold for a median $427,000, real estate tracker DataQuick reported Tuesday. That’s a boost in activity from February’s 2,541 sales at a median $410,000, but it was a nearly 20 percent drop from the sales in March 2013. Last month was also the slowest for a March since 2009, toward the end of the Great Recession. March is generally the month in which activity in the housing market picks up, as weather improves and some families plan to move during the summer.
DataQuick analyst Andrew LePage said there are a variety of reasons for this year’s slow start.
“The inventory of homes for sale remains thin in many markets. Investor purchases have fallen. The jump in home prices and mortgage rates over the past year has priced some people out of the market, while other would-be buyers struggle with credit hurdles,” LePage said in a statement, “Also, some potential move-up buyers are holding back while they weigh whether to abandon a phenomenally low interest rate on their current mortgage in order to buy a different home.”
Last month’s median $427,000 was still a 12.4 percent jump from March 2013’s $380,000 price tag, but the value gain continued an overall trend of slowing annual appreciation. In June, for instance, when the median was $416,500, home values were up 24.1 percent from a year earlier.
Norm Miller, a professor of real estate at the University of San Diego, said it’s expected that real estate appreciation would slow. He said, however, that the housing market is returning to normalcy due to a decline in bank-owned home sales. Foreclosure resales made up 5 percent of the homes sold in March, whereas in March 2011 they made up 33.2 percent of transactions.
“As you lower the distressed sales, it looks like sales volume is down, but the point is it’s not really down. It’s just that these distressed sales are down and regular sales are probably doing just fine,” said Miller, noting that the historical appreciation rate is two to three percent above the inflation rate.
Increasing mortgage rates may also be keeping prices from appreciating drastically. Rates for a 30-year-fixed mortgage rose to an average 4.34 percent in March, up from 3.57 percent a year earlier, according to Freddie Mac.
In March, there were 6,223 active listings in the county, up from 4,265 a year earlier, the San Diego Association of Realtors reports. By comparison, there were more than 12,000 listings in March 2011.
In Southern California, home sales hit their lowest levels for a March in six years. Los Angeles County home values are up 14.5 percent to a median $435,000, while Orange County prices are up 14.9 percent to a median $580,000.
Source: Jonathan Horn / UT San Diego / April 15, 2014
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