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Before COVID-19, San Diego home prices were rising. What now?

Posted on April 22, 2020 | Leave a comment

SCAS note: Remember San Diego is tourism driven. How long can Ab&b go unrented? How long until the tourist return? How long can tourism employees afford to live in SD? How many will still have jobs after the lock-down ends? Many factors will be driving home prices; not just inventory or interest rates.

San Diego County’s median home price continued to rise in February to $587,000, reflecting optimism in the home market before the coronavirus crisis.

Sales in February represent purchases that began in late December and January, meaning concerns over the virus were hardly a blip on the American radar.

There were 2,835 home sales in February, a 14 percent rise from the same time last year, said CoreLogic data provided by DQNews. Also, the median price was up 6.8 percent in the 12-month period, nearing record highs.

Jordan Levine, senior economist for the California Association of Realtors, said he expects prices to decrease in San Diego and throughout California.

Some San Diego analysts have pointed to the high demand for homes in the area and low inventory as unlikely to change. But, Levine said the demand factor could weaken if the virus and the economic situation gets worse.

He said San Diego was on strong economic footing going into the crisis, which led to a big demand/home inventory imbalance. But, he said it’s hard to say if that level of demand will remain.

“If folks start being laid off,” he said, “you start to see that demand erode.”

Report: Home Prices to take 2 years to recover

Posted on April 16, 2020 | Leave a comment

A new report by Unison forecasts that it will take two years for home prices to recover from the effects of COVID-19.

Unison gave numerous reasons as to why the industry is in a better position to survive an economic depression when compared to the Great Recession more than a decade ago. The report said the industry is more prepared due to the current presence of more government support available to aid homeowners in particular versus in the past.

The report also offered additional insights into what the industry can expect moving forward, including the claim that regarding industry supply and demand, the amount of housing available for sale will be limited in the near future, while demand will remain steady and strong.

One possible reason given for this, according to the report, is that homeowners will be more likely to sell their stocks and bonds to stay afloat post-crisis, versus selling their homes, which would require moving their families.

Additionally, rate cuts by the Federal Reserve have caused mortgage rates to plummet to record lows, an occurrence that could provide potential home buyers with a small boost to get their foot in the door—and real offers on the table—once the market recovers.

Yet, the report warns that this recovery will not be uniform across the nation, but instead, will rely more upon regions and individual factors affecting each region. For instance, those regions particularly dependent on travel, entertainment, and oil and gas, which includes Las Vegas; Orlando; New Orleans; Honolulu; and Oklahoma City, as these areas have been hit especially hard by the current crisis.

Home prices before COVID-19’s spread continued their upward trajectory, as CoreLogic’s Home Price Index (HPI) revealed that home prices rose 4.1% annually in February. This represents an increase from February 2019’s gain of 4%.

The HPI has increased on a year-over-year basis every month since February 2012 and has gained 63.6% since March 2011.

The overall HPI was 10.1% higher than its pre-crisis peak in April 2006.

Homes in the lowest-price tier rose 6% annually in February, compared to 5.2% for the middle-price tier. The middle-to-moderate price tier saw home prices rise 4.5% and 3.6% for the high-price tier.

https://themreport.com/daily-dose/04-14-2020/report-home-prices-to-take-2-years-to-recover

San Diego sellers are taking homes off the market during COVID-19 crisis

Posted on April 15, 2020 | Leave a comment

Sellers are taking their homes off the market at an increasingly fast pace in San Diego County as the coronavirus pandemic continues.

Redfin data shows 12.7 percent of all listings were removed, without selling, from March 7 to April 3. That’s higher than the national average of 9.5 percent.

In terms of raw numbers for San Diego County, it comes out to 957 fewer homes on the market for shoppers in the month-long period.

It is common for some homes to be delisted in a normal market for various reasons, such as a seller realizing they didn’t really want to move. But, for comparison, 4.8 percent of homes were removed in January in San Diego.

Analysts say, for now, the strategy for many sellers has been to pull homes off the market during the crisis and try again in the summer.

Taylor Marr, Redfin lead economist, said they have yet to see a substantial lowering of prices, even as millions of people are out of work.

“It appears there was instead a big pull to try again later when you can hold open houses, attract lots of buyers, and other usual tricks that make homes sell for more money,” he said.

Before COVID-19, San Diego home prices were rising. What now?

Report: Home Prices to take 2 years to recover

San Diego sellers are taking homes off the market during COVID-19 crisis

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