“I think I can. I think I can. I think I can.” The San Diego Real Estate Market is sounding like the Little Engine That Could. November sales numbers reflected another month-to-month increase, albeit a little one. The median price inched up $500 to $335K. Compared to November of 2009, the San Diego Median home price is up 3.1%. We’re outpacing Southern California, which is up only 0.7% as a whole. San Diego’s November 2005 peak of $517,500 seems a lifetime ago.
Although the recent growth is good news, the sales volume has been down for five straight months on a year-over-year basis. This is likely because there were tax incentives to home buying earlier in the year and those sped up a lot of buyers. San Diego’s sales volume is down 18.5% from November of last year. We’re unfortunately outpacing Southern California, which is down 15.5% as a whole.
An improving economy and job market would likely bring many buyers back into the game. USD economist Alan Gin forecasts 10,000 more jobs in 2011 in the county, which would almost make up for the 11,000-job loss over the last 12 months. This should also help sales of the higher end homes, including a lot of Carlsbad Real Estate, which are still taking a hit because of lending challenges and lack of move up buyers.
What I find really interesting is how low the level of new construction is in the county. Alan Nevin, economist at MarketPointe Realty Advisors, says the figure is far below the 10,000-unit count needed to meet an annual 30,000 person population growth the regions expects for the next decade. Unless construction picks up significantly, this could ultimately lead to a shortage, which would drives prices up.
It is still unclear whether our market has fully made it out of the valley, or whether there are still more hills to climb. “I think I can” could always become “I thought I could.” Personally, I’m out there cheering on the Little Engine with all of the encouragement I can muster. Carlsbad and the San Diego area as a whole are fantastic places to live and our ocean breezes need to provide that Little Engine with a tailwind.
*This article pulled info from San Diego Union Tribune articles, December 14, “Jobs, not housing dominate real estate conference,” December 15, “SoCal home prices outpaced San Diego’s in November,” and December 14, “Home prices inched up in November.”