San Diego County Property Sales Plummet in 2006

San Diego County endured it's worst year for property sales since we've been counting: 1998. Home sales were down 23.4% last year. Condo sales were off 26.1%. This is three years in a row of declining sales. The question becomes, is this the bottom?

Interestingly, the median price for homes was flat at $575,000, while the average price gained 2.3% to $728,574. The year also ended on an up note with the median price rising off the year's low which was reached in October.

The median price for condos fell 4.9%, the first year-over-year loss since before 1998. The average price was down 2.6%.

2007 Forecast
Let's start by examining last year's predictions.
The National Association of Realtors said:
· national sales to drop 3.7%, 2006 to be second best year ever,
· median home price to increase by 6.1%, and
· mortgage rates to increase, will be 6.6% at the end of 2006.
National sales dropped 9% in 2006, which made it the third best year ever, the median national home price for 2006 rose 1.4% to $222,600 and 30-year fixed mortgage rates ended the year at 6.11%, according to Freddie Mac.

Next, the California Association of Realtors:
· California sales to decline by 2% in 2006,
· median home price to increase by 10%,
· and mortgage rates to be in the low- to mid-7%.
Sales plummeted 23% and the median price of a California home gained 7%.

The Real Estate Report said about San Diego County:
· sales will be stable or decline slightly,
· the median home price will gain 5%, and
· mortgage rates will go over 6.5%.
Home sales declined 23.4%, the median home price was flat, and mortgage rates, as previously mentioned, ended the year at about 6.11%.
I am definitely getting rid of that crystal ball.

Anyway, let's see what everyone is predicting for this year.
First, the National Association of Realtors:
· national sales will be comparable to 2006,
· median home price to increase by 1%,
· and mortgage rates to increase, will be 6.7% at the end of 2007.

Next, the California Association of Realtors:
· California sales to decline by 7% in 2007,
· median home price to decline by 2%.

Now, what do we think is going to happen in San Diego County:
· I'll go out on a limb and say sales will increase by 10% next year. Last year was the worst year for home sales since before 1998. I think there's some pent-up demand and the local economy is not bad,
· the median home price will fall 1-2%, and
· mortgage rates will end the year around 6.5%.