There are only two groups are saying that the bottom has been hit: NAR and Federal Reserve. Everybody else is saying that this market has a long way to go down to get to the bottom.
This is Hard Luck for Housing in San Diego:
http://www.signonsandiego.com/news/business/20070215-9999-1b15housing.html
Countywide price median at its lowest point since July 2004
By Roger Showley
UNION-TRIBUNE STAFF WRITER
February 15, 2007
San Diego County housing prices slid a bit further last month, returning to mid-2004 levels, as buyers pressed for more concessions from builders and discounts from sellers.
The overall median price stood at $472,000, down 5.6 percent from a year ago and $23,000, or 4.6 percent, less than in December, DataQuick Information Systems reported yesterday. The last time the median was that low was in July 2004, when it was $470,000. The market reached its all-time peak of $517,500 in November 2005.
Single-family resale homes, the biggest part of the market, shed $20,000 from the January 2006 level of $560,000, but the latest median of $540,000 was unchanged from December.
Similarly, the resale condominium median was unchanged at $380,000 from December to January. It was 3.6 percent below the year-ago level of $394,000.
It was in the new-housing sector that the biggest price fluctuations occurred. The median for newly built houses, condos and condo conversions was $395,000, down 8.8 percent from the $433,000 median one year ago and a dip of 14 percent from the December median of $460,000.
Housing prices
Tim Sullivan, a San Diego-based real estate analyst, said what's at work in the new-housing category is a buildup of completed, unsold inventory – finished homes sitting empty in subdivisions and condo projects.
“Inventory (of unsold homes) is the bugaboo everyone is focused on,” Sullivan said.
Sharon Hanley, who publishes a weekly bulletin on local new-home sales, reported that the inventory of unsold homes stood at 5,095 at the end of January – a 36-week supply – with 871 detached and 4,224 attached homes available. At the same time five years ago, the inventory was 2,378 homes.
To reduce the backlog last year, many builders began offering incentives, such as upgrades, discounts and special financing.
Tom Archbold, vice president for sales and marketing at San Diego-based Hallmark Communities, said the company's just-opened, 22-unit Vineyard project in San Marcos offers $30,000 in incentives on single-family homes built on small lots. Prices range from $459,000 to $554,000. Three of the first seven homes released were sold over the weekend.
Archbold said the incentives, usually taken in the form of interest-rate buy-downs, may not last much longer.
“It's not going to get any better than this,” he said.
Hallmark President Mike Hall said last year's sluggish new-home market prompted him to delay his next project, Dixie Village in Oceanside, by several months. Grading is now scheduled to start in April, with sales beginning in June.
“There was a lot of inventory on the market, and that caused prices to soften,” Hall said. “We have enough lots to build on right now, so we're holding them back.”
Tony Pauker, who heads Olson Co.'s San Diego division, said his sales staff detects a slight change in mood among visitors to the company's projects.
“Traffic isn't up terribly in terms of gross traffic, but of those, the true buyers are actively looking in the market,” Pauker said.
To adjust to the slower pace of sales, Olson plans no new openings this year, Pauker said.
DataQuick reported that San Diego's home sales in January totaled 2,772, 4.3 percent below year-ago levels.
The January sales pace marked the 31st straight month of year-over-year declines, but it was the smallest drop since August 2005 and sharply contrasted with the 18.1 percent year-over-year decline registered in December.
The figures were derived from a revised methodology adopted by DataQuick that includes about 10 percent more transactions than previously considered. The way regional median prices are calculated also was altered slightly.
On a month-over-month basis, January had 27.5 percent fewer sales than December, but it was the smallest January pullback from December sales levels in five years. January almost always sees fewer sales than December because so many builders and consumers want to close escrow for tax reasons before the end of the year.
By other measurements, the housing market is not necessarily recovering rapidly from the 2006 downturn. The number of active listings this week on the Sandicor multiple listing service stood at about 16,700, higher than 16,300 last month and 14,200 a year ago, but lower than the cycle's peak of nearly 23,000 in August. The average time it took to sell a resale house last month was 81 days, compared with 69 days a year ago.
Even if slower than a year ago, San Diego's sales pace was much healthier than in other Southern California counties, DataQuick reported. There were 18,128 sales in Southern California last month, down 17.2 percent from January 2006. Riverside County was off 34.2 percent, followed by San Bernardino County, down 28.5 percent, and Orange County, down 16.3 percent. Los Angeles was off 6.9 percent.
As for the resale market, David Cabot, president of the San Diego Association of Realtors and a top executive with Prudential California Realty, said agents in his company and around the county were more optimistic about the coming year.
“I believe the bottom has been hit and should level out and should be going up a little bit,” Cabot said. “I don't know if that is accurate; we'll have to wait until June to see.”
It wasn't just real estate agents who were seeing an end to the downturn. Federal Reserve Chairman Ben Bernanke spoke before Congress yesterday about the “drag from housing” diminishing, while his predecessor, Alan Greenspan, told a Canadian audience that the “worst is behind us.”
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