Housing market slipped further in December
By: ZACH FOX - Staff Writer
Analysts say credit crunch hit high-end homes | ∞
NORTH COUNTY -- Home prices in North County continued to slump in December as a credit crunch took a serious bite out of the upper end of the housing market, according to a new report by the North San Diego County Association of Realtors.
The median price of detached homes was $569,000, down 9 percent from the same month a year ago, and 3.4 percent less than November's price.
Even steeper was the fall in the median price of condos and detached homes combined: an 8 percent dive in one month, to $485,000.
A likely reason for the sharp decline in the aggregate median was that sales were relatively stronger for low-priced homes and weaker at the upper end of the market, said Robert Brown, who compiled the report and is an economics professor at Cal State San Marcos.
"It didn't surprise me at all," Brown said. "It's a trend that we've really been seeing for several months. It's sort of surprising it hasn't happened sooner, with sales down for a while now."
The median represents the middle point of prices, with half of the homes selling for more and half selling for less.
Year-over-year sales numbers for local homes priced more than $1 million fell 39 percent to 88, according to the report, known as HomeDex.
Upper-end home sales were higher in November than the previous year, and the numbers had remained strong through much of the year while the rest of the market struggled.
Market participants said that one reason fewer expensive homes sold is that mortgage defaults have led banks to tighten their lending standards, especially on "jumbo" loans -- those for values over $417,000 -- that are increasingly difficult to obtain.
A loan under $417,000 that fits certain criteria is eligible for purchase by Fannie Mae or Freddie Mac, corporations chartered by the government. That backing encourages lenders to make those loans.
"I'm seeing just about the same (number of applications). The problem is we can do a lot fewer of them," said Dave Hopkins, a senior loan officer with Rancho Financial Mortgage, a brokerage firm based in Rancho Bernardo. "The programs are just not available any longer."
Jumbo loan financing has also become more expensive. Interest rates on jumbo loans historically were less than 0.25 percentage points higher than the loans for smaller amounts.
Since September, they have cost almost a full percentage point more, according to federal government reports.
And buyers remain scarce. Total sales of detached homes in December were down precipitously in North County, dropping 34 percent from last year and 1.1 percent from November, the HomeDex report said.
The $569,000 median price last month for single-family, detached homes was the region's lowest median since November 2004.
North County's median price hit an all-time peak of $667,000 in June 2007 and has fallen 14.7 percent since.
While the median price fell 3.4 percent from November to December, the median price per square foot in North County declined 6.1 percent to $263, or 14.6 percent less than in November.
That could mean buyers were getting more house for their money or that larger, more expensive homes were not selling.
"I believe that the price drop is even greater than the median prices are showing," said Dennis Smith, a Carlsbad-based real estate agent. "If your house is 3 percent larger and you're getting a 3 percent drop in price, it's a 6 percent drop in real prices."
The average home price, the sum of all home prices divided by the number of sales, showed a steeper decline in price values.
For all of San Diego County, the average sale price tumbled 9.5 percent from November to December while the median showed a 6.1 percent drop during that time.
For North County, the average fell by 5 percent month to month, compared with the 3.4 percent downturn in the median.
Price declines have led some real estate agents to encourage consumers to buy.
"(Prices) may fall a little bit more, but I think we're awfully close to the bottom," said Jerry Kalman, a Realtor in the Fallbrook area. "We'll bump along the bottom for a while, but I don't think we'll see the decline we saw this year."
Not all Realtors agree with Kalman's forecast. Smith said he thinks the county could be as much as 18 months away from seeing prices hit their lowest point.
But he still thinks consumers should buy a home as long as they plan to stay for a long period.
"This is the best time to buy within the last three years because prices are down from where they were three years ago," Smith said. "Is there still room for them to go down more? Definitely."
-- Contact staff writer Zach Fox at (760) 740-5412 or zfox@nctimes.com.
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NC Watcher wrote on Jan 9, 2008 4:52 AM: O8 will bring another double digit drop, it is just a question of 10%, 20% or even more down, look out below!
Jan wrote on Jan 9, 2008 6:35 AM:Wow. What a surprise? NOT. Just think we get to read these amazing headlines for the next 2 to 5 years. Go talk to a Realtor, they will they you know is the best time to buy. What they want tell you is they flunked out of highschool because they can't understand math.
Jack wrote on Jan 9, 2008 6:57 AM:How long will the Bush administration refuse to acknowledge that we are on the financial precipice? We are looking at a depression worse than 1929. The primary culprit is the Republicans, who have allowed the money lenders to run roughshod over the borrowers.
heckuva job GOP wrote on Jan 9, 2008 8:14 AM:Foreclosures rising, we're now in a recession, gas at record levels, debt at record levels, manufacturing jobs disappearing, dollar at record lows, trillions in debt to the Chinese to pay for the Iraq quagmire, tax cuts for the super rich, etc etc
WE Made Our Bed . . . wrote on Jan 9, 2008 9:10 AM:Now we gotta sleep in it. The Republicans will still try to tell us that tax cuts stimulated our economy. The fact is, people using their home equity like an ATM stimulated the economy. The money is gone and now the economy is dying. Any surprises????
It's Time now! wrote on Jan 9, 2008 9:14 AM:Enough is Enough people, it is time to vote Democrat!!!
JB wrote on Jan 9, 2008 9:46 AM:This is not a political issue, insofar as voting Democrat or Republican will not fix this situation. This issue has entirely to do with a lack of self discipline and personal accountability, coupled with an amazing sense of entitlement. If you want to place blame, look in the mirror first, then go out and do something to start changing the educational system in this country. We now have at least 3 generations who have not been taught history, but who have been taught that they are special.
david wrote on Jan 9, 2008 10:27 AM:It is not matter if democrap or a Republican who goes into the office is going to change much. You really think Clinton or whoever will fix the problem? Matters are to get worse on a grand socioeconomic scale making housing slump seem insignificant to the grand sceme of things.
Financial Expert wrote on Jan 9, 2008 11:16 AM:Home prices will fall 50% to 80% by the time this debt crash is over. A home is just a place to put your stuff and sleep. Paying over $150,000 for most homes is foolish. Paying interest on money (paying rent on money) keeps most people poor. Save your money and pay cash in a few years when cash will be king again.
Duped wrote on Jan 9, 2008 11:17 AM:Boy do I feel like an idiot. The mass media told me that we were in a Goldilocks economy -- a permanent high plateau of prosperity.
It's Time now! wrote on Jan 9, 2008 12:58 PM:Oh, let's don't point any blame on our current administration , whom did't contribute to any of the problems that are here. Their fuel tank is always full and mortgage always paid. It was everyone else that created this mess. The war in Iraq just started itself and
the rest just caved in. The Clintons left a fiscally solvent debt. So who's watch did 911 happen on?
JB is dead on.... wrote on Jan 9, 2008 1:09 PM:As a society, we seem to think we are entitled to have everything we want. Our children are selfish materialistic brats too. We're not special just because we have a pulse. We're special because of what we DO. What kind of impact are we making?
I have an idea. How about saving for the things you want? How about living within your means? How about living with integrity in every area of your life?
Still High Prices wrote on Jan 9, 2008 2:05 PM:I noticed how this article throws all kinds of numbers out on average this and that. Why not break down these numbers in 100,000 increments per zip code and you will see house declines in some cities much greater than 10% or 15%. Until the Lending industry lends liberally again or until wages move up or prices fall more, how many people can really afford to buy houses that are still priced to high.
YOu people wrote on Jan 9, 2008 2:16 PM:You guys crack me up with your finger pointing. DEM's or Rep's who is to blame??? Not ME!!! you greedy people are to blame.. speculating in your houses. If you buy something beyond your means did George W make you sign the papers??? I suppose we can tie the fall of Rome to the Bush family... and the Clintons!! HA! If that sex driven maniac would have done something about terrorist on his watch maybe we wouldn't be where we are. OH I know I know your outraged that I attacked your idol... PLeaze!!!! No more Bushes or Clintons in teh white house.... try something new ... and pay for what you buy! Go to Pigginton website if you need help. No bail outs in a free society.
Question for Financial Expert wrote on Jan 9, 2008 4:09 PM:You said, "Home prices will fall 50% to 80% by the time this debt crash is over." Probably so, but why do you think so?
The National Association of Realtors has made predictions over the last three years that each time turn out to be dead wrong. (To be fair, I want to point out that one realtor, Dennis Smith, as cited in this article believes the end is not yet in sight.)
the same dennis wrote on Jan 9, 2008 8:06 PM:Is that the same Dennis Smith telling everyone there was no bubble? Google "Dennis and Sunshine Smith San Diego Bubble" Those types of Realtors are unethical or stupid.
TO: YOu people wrote on Jan 9, 2008 8:38 PM:95% or more of the people in this country did not buy into the crap with the mortgage situation. Yes, we are the ones still making our payments fine.You are pointing the your fingers at the wrong crowd. If you want some new names in our public offices-vote for them. Don't sit there so high and smugg calling everyone else dumb when your probably one of the people who profitted and was dupped like everyone else.
Jan the teacher wrote on Jan 9, 2008 9:03 PM:In the end, you will pay. Just like 1990s, the government will bail them out and just add it to the government debt, crank up the money printing presses, devalue your assets and put the bill on our young kids and grand kids. Boy- the younger generations are going to be upset with the baby boomer generations. Old grandpa better get ready for some doors to be slammed in his face as the younger generations begin to understand how their parents and grandparents sold out their future.
The only hope is Ron Paul.
Sideliner wrote on Jan 10, 2008 7:07 PM:In a market that is both overpriced and oversupplied, prices will decline.
Roberto1 wrote on Jan 11, 2008 9:36 PM:18 = rented apartment
19 = bought house & built second house
sold at 30 years old
30 bought home,...market crash bought second home...and living happily ever after....
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