San Diego Foreclosures Pulled Down Median Home Price

by Donald Hanz on cities

San Diego foreclosures pulled down the median home sales price by 7.6 percent in January, based on data from a real estate firm.

But analysts explained the decline as a statistical fluke and contended that the drop is not starting a downward trend and that home prices will not go down further sharply.

The median sales price fell to $305,000, a decrease of $25,000 from the median in December 2009 and the biggest month-over-month drop in the 22 years the firm has been tracking home sales in San Diego. The drop also put the median sales price the same as the median price for homes for sale in the spring.

However, the January 2010 price was higher by $25,000 than the $280,000 median price in January 2009, the lowest median since home prices started falling in the latter part of 2005.

Total home sales in January also dropped to 2,322 units, a decrease of 36.4 percent from December and a 5.6-percent drop from January 2009. The drop was attributed to the post-holiday atmosphere.

While most owner occupant buyers did not pursue their home purchases immediately after the holidays, investors continued to pursue lower-priced San Diego foreclosures with cash offers.

In January, more than 38 percent of home resales in San Diego were properties that went into foreclosure within 12 months prior to their resale. It was the biggest foreclosure sale percentage since June 2009. The peak was reached in January when foreclosure sales to investors accounted for 55 percent of total home sales.

Some analysts projected that the median home sales price could fall past the $280,000 price level, or could rise past the December peak price of $330,000.

Analysts said it is not easy projecting prices because of the various factors affecting home prices. They said that prices could rise amid a possible increase in foreclosures in California and in San Diego if many of the new foreclosures are high-priced properties.

Other factors are unemployment, mortgage rates, federal government policies, availability of jumbo loans, use of loans guaranteed by the Federal Housing Administration and flipping opportunities.

Mark Marquez, head of the San Diego Association of Realtors, explained that the residential market is suffering from inadequate inventory. He added that the number of San Diego foreclosures entering the market has dropped because of the rise in approved short sales, in mortgages awaiting modification, in foreclosed properties but not yet released by lenders and in homes not yet released to the market by owners.

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