Well that was EASY!
I just pressed the “That was easy.” button on my desk…
There isn’t much to report on this month – the data is pretty flat compared to last month, and the feeling of the market is pretty much the same as well. I’ll report on some key numbers below – please don’t hesitate to reach out if you have any questions.
Median price (all property types and all price ranges) is still right at that $495,000 level, which represents a 6.5% increase over this time last year. We were trending down in this number at this time last year (common for this time of year) whereas we have held pretty stable since May/June, so that shows that some strength still exists in the selling side. For reference, this number peaked at $515,000 in 2006.
Active marketing time continues to hover around 30 days – pretty consistent since April.
Months of inventory is still bouncing around 2.5.
Fun random facts:
Median price on 1 bedroom properties are up 11.2% year over year. 2 bedrooms are up 12%. Compared to 3 bedrooms being up (only) 6.8% and 4 bedrooms up 5.4%. Does this mean that buyer demand is being influenced most by affordability, or is there some wider social shift going on that is bigger than that? My hunch is the former, but would love to hear your thoughts if you disagree.
Interest Rate Corner
Mortgage rates had a very good week. The average rate we have seen our clients locking this month have been in a range from 3.25% to 4% The first few weeks of the month rates started to inch there way back up but after the Fed decision to once again delay a rate hike the bond markets and equity markets responded favorably. 2016 is on pace to be the lowest average mortgage rate in 40 years. I am still bullish on rates in the next 3-6 month but there are significant risks heading into the election and 4th quarter. The opportunity is now for buyers and clients seeking a refinance to cash out or save on monthly interest. If you would like to experience our 5 star guaranteed service or subscribe to our market updates please email me at Paul@TeamJohnsonSD.com
The data is showing that both median price and housing inventory levels remain flat compared to last month at $495,000 and 2.5 months respectively. These numbers, as in the case with all my monthly updates, reflect ALL housing types (detached, attached, manufactured home) across San Diego County as a whole. I usually segment some of this down in my personal research but try to keep it general in these updates for simplicity. This month, I will dive into more into these segments below as it relates to our investment strategy – hopefully it can help you too.
What the data doesn’t show is the “feeling” of the market which I believe won’t be reflected in data for another month or two. About 3 weeks ago it felt like a light was switched, and suddenly we found ourselves in a quasi-buyer’s market, despite still ridiculously low inventory….it was really odd. One week we were getting multiple offers on all our properties. The next week we had a few fall-outs and showings went dead. Suddenly all the calls that I was getting from our real estate partners and other investors were referencing the slowdown of the market. A good buddy of mine pointed out the correlation to this slowdown and the Republican National Convention. Coincidence? Probably…but funny to think about.
Anyway, it was odd enough to warrant being a part of this update, but I don’t feel it’s anything major. This is the time we usually get a slowdown and I feel the unrest in the world and at home most likely just exaggerated that a bit. Going forward through the Holidays it is likely that we will see a lengthening of the market time data (currently at 29 days) and a slow decline in median price across the board.
The slowdown sparked something in me to share some more segmented market data in case it helps you make better decisions, or someone you know. It’s also just interesting stuff. This is the data we dig into to help us make better buying and selling decisions.
- Homes valued at under $750k are UP 5.4% year over year, while homes valued between $750k-1.25million are FLAT, $1.25-2million are DOWN 0.2%, and homes value over $2million are DOWN 6.7%.
- Factoring in just the properties valued under $750,000, detached single family home values are UP 3.6% year over year, whereas attached homes (condos/townhomes/twinhomes) are UP a whopping 11.5% year over year. We equate this dichotomy to rising rents pushing new buyers to the lower purchase prices of these attached homes, which are allowing buyers to still own a home for less monthly payment than renting.
- Here are some highlights by region. I am using a 3 month rolling average of the monthly median house number which takes out some of the random monthly swings that are more prevalent at the regional level (number include all property types and price ranges):
- Oceanside is up 5.9% year over year with a current median price of $450,000 – rising trend line
- Santee is up 7.6%, currently sitting at a $425,000 median price – rising trend line
- Chula Vista is up 4.4% with a $445,000 median price – falling trend line
- Ramona is up 6.3% with a $458,000 median price – flat trend line
- San Diego CITY is up 9.4% with a $432,000 median price – rising trend line
- La Jolla is DOWN 7.9% with a $1,036 median price – falling trend line
- Vista is the SAME compared to last year at $446,000 median price – trend line still flat
Hopefully this extra info provided a little insight for you and wasn’t a complete bore. Interest rates still are a major factor as they are keeping buyers in the game with affordability even with all the increasing prices. I will let Paul Johnson of Cross Country Mortgage close us out with his interest rate wrap up. – Paul Johnson, Cross Country Mortgage