San Diego County’s housing market deepened its slump last month, with the median home price now down 20 percent from its peak in November 2005.
JOHN GASTALDO / Union-Tribune
Carlsbad renters Bill and Teri Smith cashed in on the bursting real estate bubble to buy a starter home in Oceanside.
DataQuick Information Systems yesterday reported the median price for all county homes in February was $415,000, down 3.3 percent from the previous month and down 13.5 percent from February 2007.
The report showed a continuation of falling sales and declining prices that began after a dizzying run-up of values between 2000 and 2005. In recent months, foreclosures have spiked locally and in other high-cost communities nationwide, as risky adjustable-rate mortgages have begun resetting at higher interest rates.
The number of homes sold in February was 1,954, down nearly 32 percent from a year ago. Sales were 7 percent above January’s figure, however, reflecting the view of some real estate agents that business is picking up.
February was the 44th straight month that total sales of homes of all types dropped on a year-over-year basis.
Economist Christopher Thornberg, co-founder of Beacon Economics in Los Angeles, said the overall trend of falling prices and slowing sales reflected by the DataQuick report was “grim” news.
“No matter how you look at it, it’s a mess,” Thornberg said. “It’s just ugly out there, and it is getting uglier.”
University of San Diego economist Alan Gin said the report showed “continued weakness in the housing market by all measures.”
Ryan Ratcliff, an economist with the UCLA Anderson Forecast, said foreclosures are helping to pull down prices.
“This is as depressed as San Diego sales have been in a long time,” Ratcliff said. “These are historic lows. What we have really seen since April or May or last year is that prices have headed straight down. I think that is a function of distressed sales. The foreclosure problem is unprecedented.”
February foreclosure data weren’t available yesterday from DataQuick. In January, there were 1,305 foreclosures in the county, up 32 percent from the previous month and up nearly 257 percent from January 2007.
DataQuick analyst John Karevoll noted that February is traditionally a slow month for sales, and that makes it difficult to draw firm conclusions. In some neighborhoods there was little or no sales activity, he said.
Compared with other parts of California, “the trends appear to be less severe” for San Diego, Karevoll added. “That is probably because San Diego has experienced the worst of the decline already.”
The countywide median price for resale houses was $430,000, down nearly 5 percent from January and 20 percent from February 2007. The median price represents the midpoint of all prices, with half above and half below that amount.
The February median for resale condominiums was $300,000, unchanged from last month but nearly 21 percent below the February 2007 figure of $378,750.
The median price for new homes, which include condos and new condo conversions, was $553,500 compared to $540,250 in January and $410,000 a year ago.
Not everyone is worried about falling prices. In Carlsbad, renters Bill Smith and his wife, Teri, see the bursting of the real estate bubble as an opportunity to enter the housing market.
Smith, 33, who has an 8-month-old son, said he knew a major price correction was coming.
Former Federal Reserve Chairman Alan Greenspan “said there was no bubble, but I had a feeling that things were going in that direction,” Smith recalled. “We decided to bide our time. Sure enough, it did happen. We realized that it was the time to make our move.”
Smith, a Web site developer, said he recently bought a 1,190-square-foot “beautiful starter home” in Oceanside for $250,000. It was a reduction of nearly $100,000 from what the previous owner paid in 2005, near the height of the housing boom.
Bargain hunters elsewhere may take heart from DataQuick’s statewide reports. Median home prices took a dive in many of California’s larger counties in February. Southern California took the lead with an overall drop of nearly 18 percent compared with last year.
The median price in six Southern California counties fell to $408,000, the lowest level since $402,500 in October 2004. The median is 19.2 percent below the Southland region’s peak price of $505,000 last summer.
Total sales dropped 39 percent from last year in Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties.
According to DataQuick, Los Angeles County saw year-over year home sales drop by 45 percent in February, while the year-over-year median price dropped by nearly 13 percent.
Orange County saw a year-over-year sales decline of nearly 40 percent, while the median price dropped 16 percent. In Riverside County, the sales total dropped nearly 30 percent, while the median declined by 21 percent. In San Bernardino County, the sales volume fell by more than 45 percent, while the median dropped by 21 percent.
Last month’s sales total in Southern California was the second-lowest for any month in DataQuick’s statistics, which go back to 1988. Since September, sales each month have set a record low for that particular month.
In nine San Francisco Bay Area counties, the median price dropped nearly 12 percent to $548,000. Sales dropped by nearly 37 percent from a year ago.
Active home sales listings in San Diego County yesterday stood at 18,504, up from 18,443 at this time last month and 17,587 in March 2007, the San Diego Association of Realtors said.
Kevin P. Cummins, a real estate broker in Carmel Valley, said some buyers will return to the market as soon as new federal lending guidelines kick in.
The guidelines, approved by Congress, will increase the local limit to $697,500 for loans insured by the Federal Housing Administration or bought by Fannie Mae and Freddie Mac. Lower limits have forced borrowers in high-cost markets into more expensive “jumbo” loan products.
“Now individual lenders have to set up their computer systems and programs to accommodate the new limits,” said Cummins, who expects the new loans to be offered by late March.
Some local lenders have begun preparing FHA loans in anticipation of the higher limit, said Dave McDonald, president of the San Diego chapter of the California Association of Mortgage Brokers.
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