Sub-prime Loan Woes Pushing Statistical Prices Higher

The problems in the sub-prime mortgage market have had some unintended consequences. Demand and sales in the entry-level segment of the real estate market have fallen as lending requirements have tightened. Coupled with a strong million dollar plus market, we have the illusion of higher prices because high-end sales are a larger portion of all sales. That is one of the inherent problems with statistical analysis.

The median price for re-sale, single-family homes in San Diego County rose 3.6% in March from February. Year-over-year, the median price was flat. This broke eight months in a row the year-over-year median price has been negative. The median price is now off only 3% from the high of $598,000 set in November 2005. The average price for single-family gained 6.4% from the month before, and was up 4.3% year-over-year. (Read the first paragraph again.)

Home sales rose 36.7% from February. Year-over-year, sales were down 20.8%.
The median price for condos rose 0.8% to $375,000, month-over-month, down 1.3% compared to last March. This is the first time the median price for condos has been positive, year-over-year, since last March. The median price is now 4.3% below the high of $392,000 set in November 2005. Condo sales were up 29.4% from February, off 9.5% year-over-year.

My advice? Prime property in the best school districts is selling quickly and, in some instances, with multiple offers. Buyers need to be prepared to make an offer immediately on prime property. That means you need to have a loan in place. For more information about buying in a multiple offer situation, call me.

For sellers, where your home is, the condition and what segment of the market it's in, entry-level, move-up or million plus, are the determining factors in whether or not you will be able to sell your home quickly and for a good price. Demand in the entry-level market has fallen, which will impact the move-up market. The million dollar plus market is pretty much immune to the sub-prime mortgage tightening.

The real estate market is very hard to generalize. It is a market made up of many micro markets. For complete information on a particular neighborhood or for an evaluation of your home's worth, call.