2113 has been a strong year for the San Diego real estate market. From January 1, 2013 through Mid-December, 2013 there have been 35,000 homes sold, including condominiums, townhomes, and houses. And the properties are selling fast. Listings are on the market for an average of just 46 days. The average price of the sold homes this year was 99% of the list price. That means buyers are paying on average 99% of the price the sellers are asking when they put up their homes for sale.
The biggest change in 2013 was the number of days it takes to sell a home in San Diego. Average number of days on market in 2013 was 46 days compared to 73 days in 2012. This shorter market times reflect the tight inventory of homes for sale.
In other words, there are more prospective home buyers than there are homes for sale. Buyers are stepping in more quickly to make offers, and the offers are strong. Last year buyers were paying, on average, 98% of the list price. In other words, they were negotiating a price reduction of 2% on average in 2012. That negotiating power dropped in half again during 2013, with an average sale price just 1% below the average list price.
The other San Diego real estate statistics didn’t change much in 2013, but definitely serve to reinforce the notion that the market has gotten stronger in the past year. For example, at this time last year there had been just over 34,000 homes sold compared to 35,000 this year. So the number of sales has increased, but by less than 1,000 listings. The number of days it takes to sell a home has dropped by 37 percent and the number of sales has risen just 2%.
Prospective buyers are competing for just as many homes for sale. And as the number of prospective purchaser increases, the buyers have more incentive to make strong offers, and they are willing to do so. When buyers pay an average of 99% of the list price of a home, and they do it quickly, that indicates that they are comfortable with the affordability of their mortgage payment. It also suggest that buyers are comfortable with the long-term health of the market.
Another sign of recovery is the decrease in the number of distress sales, short sales and foreclosures, which result when home owners default on their mortgages. There were just over 6,000 short sales and foreclosures county-wide in 2013 compared to more than 12,000 last year. This is bad news for bargain hunters and house flippers, who are now competing for half as many bargain-priced homes.
San Diego Home prices have also risen in 2013. In 2013 the average sale price of all houses, condos, and townhomes combined was $527,636, compared to $435,313. That’s an increase of more than 21 percent. The Case-Shiller Index, which compares the sale prices of similar homes across different price categories, says that San Diego home prices increased by 20.9% this year. So all indications are that prices are up by at least 20 percent in 2013.
Looking forward to 2014, absent a major spike in interest rates, a big increase in the number of people who decide to sell a home, or a major decrease in the number of prospective buyers, or some combination of these factors, the real estate market in San Diego County to rise. Home sellers are likely to continue to benefit from the tight, low-inventory market. Home buyers can expect to compete against multiple offers on single-family homes.
For help with buying or selling a home in San Diego, call Geoffrey Schiering (619) 200-7612.