By any measure, San Diego real estate has really been taking off in recent months. We’ve been saying for a long time that San Diego was the first to burst in the real estate bubble, and it will be the first to come back out of the hole. And now San Diego homes are appreciating faster than most or all of the metropolitan areas in the United States.
The National Association of Realtors reported this week that resale prices of homes in San Diego increased by 14.7 percent in the first quarter of 2010. The median price of San Diego homes now stands at $379,000. According to the NAR, this year San Diego has experienced the 16th fastest rate of appreciation of any metropolitan area in the United States. The top-10 metripolitan areas in terms of real estate price increases are: 1) Saginaw, MI; 2) Akron, OH; 3) Cleveland, OH; 4) San Francisco, CA; 5) Grand Rapids, MI; 6) San Jose, CA; 7) Dayton, OH; 8th) Memphis, TN; 9) Gary, IN; and 10) Elmira, NY.
Home prices increased in almost 60% of the cities in the United States this year. The $8,000 Federal Homebuyer Tax Credit definitely contributed to the increases, but with the expiration of the Federal tax credits on April 30 the demand for homes has not abated. And in California, beginning on May 1 home buyers are still able to claim a $6,500 state tax credit for home purchases, on a first-come-first-served basis until the money runs out.
According to the Zillow Home Value Index, in March 2010 San Diego CA homes increased in value by 3.7%, to $364,800 from March 2009. This was the biggest upward change of any metropolitan area in the United States. The other big gainers and their current price levels are San Francisco (up 3.4% to $515,300), Los Angeles (up 3.3% to $415,300), Ventura (up 2.9% to $413,800), Santa Barbara (up 2.6% to $444,900), and Denver (up 2.3% to $212,900). This shows two things. First, there is still huge demand for real estate in California, where the weather and economy are better than just about anywhere in the country. Second, even after the recent price gains, San Diego, which is probably the best place to live in California, is still more affordable than the other major metropolitan areas in the state.
A third gauge of real estate activity comes from MDA Dataquick, which tracks home sales as recorded in the tax records. By their measure, the median price of San Diego homes increased 14.3% in the first quarter of 2009, to a median price of $360,000. Dataquick reported 8,014 home sales in San Diego County in the first quarter, which is 0.8 percent more sales than the first quarter of 2009.
As personal perspective from your San Diego real estate professionals, we’re seeing inventories and average time on market drop as home buyers have returned in earnest to the market. Home sellers who are realistic with their asking prices are having no problems selling their properties. Upper-end San Diego homes for sale in Carmel Valley, Del Mar, La Jolla, and Rancho Santa Fe are moving again, as jumbo loans are again available at very attractive rates. Home buyers are sensing the turnaround in the market and are grabbing deals while prices are down and interest rates remain low. The combination of low interest rates and low prices won’t last for long.