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Summary of 2011 and predictions for Real Estate in 2012
The San Diego real estate market has shown signs of stability in 2011. The number of San Diego houses sold in the twelve months ending December 29, 2011 increased slightly over the same period in 2010. The average sale price was down slightly, and the average amount of time required to sell a home in San Diego increased slightly. But the overall picture suggests that the San Diego real estate market has hit bottom and has reached equilibrium.
There were 21,226 San Diego houses sold in the twelve months ending December 29, 2011. The average sale price for houses in San Diego County was $483,670 for an average three bedroom, two bathroom house with an average of 2,035 square feet of living area. The average market time was 76 days on market. Anything less than 90 days is considered a healthy real estate market.
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Compare the same twelve month period ending December 29, 2010. Last year there were 21,143 houses sold, at an average sale price of $516,100 for an average three bedroom, two bathroom house with 2,006 square feet of living area. So the number of San Diego houses sold in 2011 was up a statistically insignificant 0.4% over the prior year. The average sale price was down approximately 6%, the average cost per square foot of San Diego houses in 2011 was $234.60 per square foot of living area, as compared to $246.34 per square foot in 2010. . . a decline of less than 5%.
The slight decline in sale prices can likely be attributed to an increase in the number of short sales in San Diego between 2010 and 2011. A predictor of future short sales are the number of Notice of Default & Trustee’s Sales. Note in the graph below that we see a significant continual drop in the number of these defaults—a sign of stabilization in the market.
Our 2012 Prediction:
Overall there was little change in the San Diego real estate market between 2010 and 2011. Home buyers are seeing value at the current prices, and the number of houses sold in San Diego increased in the past year, with prices down only slightly. Moving forward, our prediction is that the real estate market will continue to improve. “Improve” meaning more confidence, more activity and more sales. Our definition does not include an immediate return to 2005 pricing. The outlook for 2012 is similar to 2011 with more stability in prices and a potential for slight increase. A concern for buyers would be a prediction for a slow rise in interest rates.
Here are links to 2012 predictions for the California/San Diego real estate market:
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