San Diego County’s real estate market got off to a mixed start for 2015, with the pace of annual home price appreciation increasing in January, but sales falling.
Last month, the median price for a home sold in the county was $435,000, up 7.4 percent from January 2014, real-estate tracker CoreLogic DataQuick reported Tuesday. The annual pace was up from 4.8 percent in December, and 3.6 percent in November, but is a far cry from the 24.1 percent peak in June 2013, led by foreclosure resales and investors.
Jordan Levine, of Beacon Economics, said he expects the housing market to remain stable moving forward, with annual appreciation between 4 percent and 6 percent, a pace tied to income and population growth.
“That’s really what should dictate the price of homes, ultimately how many folks are out there in the market and what they’re able to pay,” he said, noting double digit growth can’t be sustained if incomes are not growing at the same rate.
In January, the housing market recorded the fewest transactions since March 2008, the middle of the Great Recession. Last month, 2,233 properties changed hands.
January is generally a slow month, as it reflects deals that were originated during the holiday season, an overall lackluster time in the housing market, said Andrew LePage, a CoreLogic DataQuick analyst. The number of January transactions fell 32 percent from the 3,290 recorded in December, a month in which there could have been a rush to record titles before the end of the tax year.
Also, in January, only 74 new homes sold in San Diego County, a record low in CoreLogic’s data going back to 1988.
“It’s possible that the dip in new-home sales reflects a temporary lull in the homebuilding industry triggered not by falling demand but a decline in the number of newly built homes available for sale,” LePage said. “It could be a very short-lived situation if a significant number of new-home projects are coming on line early this year.”
Levine noted that a lack of inventory, or supply, has kept the market slow. In January, there were 6,129 active listings in the county, the San Diego Association of Realtors reports. That represents a little less than three months of inventory, whereas most analysts would prefer to see about double that amount. On the demand side, Levine said an easing up of lending restrictions could help get buyers into the market. Interest rates fell once again in January, to an average 3.67 percent for a 30-year fixed mortgage, down from 4.47 percent in January 2014, Freddie Mac reports.
The $435,000 median price in January fell from the $440,000 in December.
In January, the median price for a home sold in Los Angeles County was $460,000 up 12.2 percent over the year. Orange County’s median price for a home sold last month was $562,500, up 2.3 percent over the year.
Article by: By Jonathan Horn