North County home median price drops below $600,000
By: BRADLEY J. FIKES- Staff Writer | ∞
NORTH COUNTY -- For the first time in nearly three years, the median price of a single-family home has fallen below $600,000, according to the latest report from the North San Diego County Association of Realtors.
The decline amounted to 4.82 percent, from $609,375 in October 2006 to $580,000 this October. Prices also declined from September, when the median stood at $630,000.
Not since January 2005, when the North County median was $589,000, have single-family homes in North County sold for less, said Robert Brown, an economics professor at Cal State San Marcos who prepared the Homedex report.
"The market is soft right now, said Mark Oatman, president of the Realtors group. "Sales are definitely off right now, even though we've seen a slight uptick in sales of homes this month over last. It's still a market that's leaning heavily towards buyers. People that are out there looking right now are really looking for the deal."
Sellers who must sell and builders of new homes have lowered prices, Oatman said.
Another sign of the state of the market is the number of homes listed for sale.
With 5,827 single-family homes on the market in North County at the end of October, North County has just over a 14-month supply of homes on the market. Supply is a key indicator of the market's strength or weakness. The larger the supply, the weaker the market.
Over the long term, California normally has a seven-month supply of homes for sale, according to Leslie Appleton-Young, chief economist for the California Association of Realtors. In April, the countywide supply was 10 months. At the depth of the 1992 real estate market, it was 23 months.
One thing going on in the market now, said Dennis Smith, a Carlsbad-based Realtor, is that low-end buyers are coming back.
Those low-end buyers had been disproportionately hurt by the credit squeeze earlier this year from the subprime loan debacle. Burned lenders had tightened standards excessively, skewing the median toward the high end, where credit issues weren't a problem, he said.
But political pressure and threats of government intervention to help low-end buyers have convinced lenders to ease off.
"Now we are seeing a return to a more normal credit ability," Smith said.
This is helping sales at the low end of the market, resulting in a decline in the median price -- the midpoint of the market, where half of homes sell for more and half for less.
The Realtors group's report showed prices condominiums also had moved toward the lower end in October, compared to October 2006.
Median prices for attached homes tumbled 11.65 percent, from $395,000 in October 2006 to $349,000 in October 2007, the lowest in a year.
Oatman attributed the decline to a large supply of condos for sale, especially new condos.
"Many of those are from developers who are offering some pretty good incentives to get out from under large projects," Oatman said.
Single-family median prices had remained near record levels for much of this year, even as sales fell. The North County peak came in June, when the single-family median price reached a record high of $667,000.
Countywide, the single-family median price reached a peak of $604,250 in 2005, then declined 0.4 percent to $601,760 in 2006, the California Association of Realtors reports. North County single-family home prices have long been significantly higher than in the rest of the county.
The 411 single-family homes sold in North County in October represent a 35.28 percent drop from 635 in October, 2006, according to Brown's data.
North County's condo sales have also fallen, the report indicated. In October, 175 condos sold, a 21.64 percent decline from October of last year, when 222 sold.
The supply of homes for sale has fallen slightly in recently months, Smith said, but at just over 19,000 single-family and condo units for sale countywide, inventory remains roughly double the average over the last decade.
Sales are likely to slow for the rest of the year as the holiday season gets underway, Oatman said. The period from Thanksgiving to Super Bowl Sunday is traditionally the slowest for housing sales, he said.
Contact staff writer Bradley J. Fikes at (760) 739-6641 or bfikes@nctimes.com.
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Monica wrote on Nov 10, 2007 2:08 AM:Finally! May they continue to fall. Housing is way too expensive. It's time prices came back to reality. I am looking forward to the day when my daughters and I can purchase my our own home.
JSten wrote on Nov 10, 2007 6:45 AM:Sorry guys. This story reads high on my crap-o-meter. This thing reads like the spam I get on hot stock tips. Self serving and wrong. This market has a long way to go to get to where its going. This is just a new version of the same old "I wish it were true" song sung by the realtors last year. Low end buyers are still priced out of the market due to tighter lending rules and NO MONEY. High end buyers who have money are waiting for thing thing to hit bottom. In some sectors, affluent buyers may just ignore the market and buy because they want to and can. But those of us in the swamps cant do any more than we could last year what with $4.00 per gallon of gas, the cost of the war and god knows what else. A few percentage ticks in the price of homes is irrelevant.
KirkH wrote on Nov 10, 2007 8:54 AM:"It's still a market that's leaning heavily towards buyers." That's just flat out wrong if you believe in supply and demand. And that it's a bad idea to buy when prices are falling. "Oatman attributed the decline to a large supply of condos for sale, especially new condos." Again, wrong. The new Case Shiller Index for San Diego is broken into high, middle, and low end housing markets. Prices are dropping in all three. I used to be bothered by people who believed "experts" in newspapers. Now I just realize that if you're crazy enough to buy based on consistently bad advice the world is probably better off that you're going to lose a bunch of money. Now is the best time to buy ever! Nothing could possibly go wrong!
Aanderson wrote on Nov 10, 2007 9:48 AM:This story is headed in the right direction, Being a lender in North County helps me keep a close eye on this market. Financially low-end and first time Home buyers will have more ways of obtaining a home now than ever in history. And I am talking about a fixed rate @ really great rates in the 5.75% - 6.375% range. NO SUBPRIME. FHA is the new Subprime so if you have been hesitant to buy in the past then pull out your old file update your info and contact your mortgage broker. Don't let the negative press fool ya there is a ton of oppty out there to get a decent home now. Go for it.
Sweet! wrote on Nov 10, 2007 10:08 AM:Now I might be able to afford one of these places on my $45k a year salary! Oh right, gas is $4 a gallon, so is milk, and banks would laugh me out of the room if I tried to get a loan for $580k...looks like I'll keep renting...or leave this state to all the Escalade driving, latte sipping, hair bleaching fat cats and their spoiled kids. Just think, pretty soon this entire state will consist of them, and the illegal immigrants they'll hire to do their lawns and housework! It's perfect! Enjoy....
More bad news wrote on Nov 10, 2007 10:09 AM:This economy is as false as bush's fake war.
AW4cryinoutloud wrote on Nov 10, 2007 10:42 AM:Oh goody! The "median" price is below $600,000.00. Think I'll run right out and buy me a couple before they go too high again.
57chevy wrote on Nov 10, 2007 10:53 AM:I wouldn't consider buying unless homes go down to $200 to 300K except Rancho Santa Fe. Their prices never go down.
Taison wrote on Nov 10, 2007 12:13 PM:The houseing still have a long way to go ....... DOWN ! You don't need "economist" or "expert" to tell you that. Just use a little bit of common sense, you will figure out that homes simply not affordable. The other point I want to make is don't buy a house why the market is going down.
A Conservative Liberal wrote on Nov 10, 2007 1:22 PM:Check out: ... to get an accurate picture of the affordability of housing. Not. Don't be fooled by realtors, it doesn't matter if interest rates are low, if you can't afford putting 20% down on a house-- like the majority of people who work for a living in SoCal-- then the house is not affordable. We've been suffering from rampant speculation spurred by $0 down loans. A house is a home, not a cash machine. Increasing the limit for jumbo loans to a million dollars is insane. Housing for the middle class shouldn't cost more than $300,000.
realtor propoganda wrote on Nov 10, 2007 1:50 PM:This article is realtor BS. I saw a three bedroom, four bath, 1700 square foot home in Shadowridge, Vista. The asking price is $399.000...and it hasn't sold! This house was selling for over $500,000 at the peak. Just wait it's gonna go a lot lower.
WallStreetInsider wrote on Nov 10, 2007 4:28 PM:Prices will be in the average 300,000 dollars in 2 years. This is very obvious for anyone inside the financial district. The reason most people don't know is because is kept very secret, although not so much lately.
So Aanderson... wrote on Nov 10, 2007 6:36 PM:Will you give me a 590k loan on $45k a year salary? And if so, just what would those payments be? And the property tax? And then let's not forget the gas, groceries, etc. etc. etc. Come on...I'd be willing to bet you were one of the brokers who helped ignorant first-time home buyers get in way over their heads with one of those "creative" ARMs, right? But you don't care, you got your commission...Those people are now losing their homes, and you're trying to double dip! I may not be rich, but I'm not stupid, and I know how your business operates. Nice try.
Monica wrote on Nov 10, 2007 10:02 PM:I don't know about the rest of you, but my daughters and I are going to try to get into the first time buyers programs and affordable homes being built by cities like Poway, Escondido, Community Housing Works and other agencies. So I think we have a good chance of getting something within our affordable comfort zone. We've dealt with Realtors showing the new homes who would try to get us into an ARM loan and $0 down etc, but we never went for it. We didn't want to get in over our heads and end up losing our home. For us, it will be a home not a way to make a quick buck by selling later. As long as the home we buy continues to suit us and the neighborhood is good, barring some opportunity elsewhere, we'd stay for a long time. I want a good place for my 4 year old to grow and attend school. We're not jumping in just yet. Just glad to see some changes coming. I'm looking for something in the 200k-300k (or less) range and NOT a condo conversion. I do feel a bit sorry for those being foreclosed now. It's sad.
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