California has served as a remarkable barometer for nationwide real estate trends over the past decade. This fact is in large part due to the widespread publicity and concentrated marketing efforts that come from the region, which tend to not only set the stage for public opinion, but also tend to exaggerate the peaks and troughs. This lead to the Southern California real estate market seeing some of the most stunning gains throughout the inflationary period of the housing bubble, as well as some of the most painful losses following the bubble's burst in 2007. However, the following 6 real estate market metricsare clear indicators that we have entered the light at the end of the tunnel.
1. No More Easy Money
The single biggest factor that contributed fuel to the fire that eventually burned the nation in 2008, was easy money loans to under-qualified borrowers. Countless 3-5 year adjustable rate home equity loans were taken out by borrowers seeking to live above their means between 2001-2006. Then when those loan rates began to balloon in 2006 and borrowers could no longer afford the payments, the foreclosure market swelled to a Tsunami. Since then, numerous precautionary measures have made their way into legislation and bank policy, ensuring that easy money loans will not be a part of the equation in the foreseeable future.
2. Housing Market Inventory At 4 year Low
As with any market, the laws of supply and demand are among the most fundamental factors effecting price. According to a CA Market Statistics and Real Estate Trends report on MontezumaProperties.com, the San Diego Real Estate market currently has only 1,742 homes on the market which is the lowest since 2008.
3. 67% Reduction in Distressed Properties On Market
It was the tsunami of distressed properties flooding the market in 2007 that was one of the biggest contributors to the steep decline in home value. Today, distressed homes make up only 5% of the properties on the market in San Diego compared to 15% two years ago.
4. Median Home Listing Price At 2 Year High
Currently the median home listing price in San Diego is $545,000 compared to $449,000 just two years ago according to the regional MLS. This rise in home value is telling potential home sellers that the waters are a bit warmer compared to the icy, foreclosure filled seas of the recent past. For buyers this means that now is the time to act while overall home prices remain a good value.
5. Pending Home Sales at 2 Year High
Numerous reports have recently surfaced that an estimated 41,790 new and resale houses and condos sold statewide last month. This represents the highest number of home sales in May since 2006.
6. Days On Market At 2 Year Low
In San Diego the median number of days on the market over the past month is 37, compared to a high of 73 over the past two years. One of San Diego's most successful real estate agents, Carlos Gutierrez of Prudential California Realty helped one client sell one home for the exact listing price and purchase another home all within 17 days. Within two weeks Mr. Gutierrez also found buyers for a $2,700,000 Luxury Property in Del Mar. "Of course a lot of people have had a difficult time over the past few years" said Gutierrez, "but luckily my team and I have really fine tuned a winning formula and have proven throughout this that we can perform for both buyers and sellers in any market. Now that the market is showing clear signs of life and health, things are really moving. But the most important thing remains that I take the time to understand and work with each and every person who reaches out to me. I make sure that they understand the current market conditions and their place in it. That's the foundation, and once we're on the same page we can make things happen quickly and confidently. That is the key."
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