I heard a presentation yesterday in which the speaker was discussing the definition of a Buyer’s versus a Seller’s market. According to this particular Broker, a Buyer’s market exists when the absorption rate for homes exceeds six months; a Seller’s market exists when the absorption rate is fewer than six months. The absorption rate is defined as the time it would take the current inventory of homes to sell given the average selling pace of the past (typically six months, averaged). Makes sense, and I thought it would be a useful exercise to see where we stand in Scripps Ranch and in San Diego County as a whole.
|
SCRIPPS RANCH |
||||
| Property Type |
# Homes Sold in Past Six Months |
Avg. # Homes Sold Per Month |
# Homes Currently Listed for Sale |
Absorption Rate * |
| Detached |
138 |
23 |
134 |
5.8 |
| Attached |
95 |
16 |
95 |
5.9 |
*Absorption Rate = # Homes Listed divided by Avg. # Homes Sold Per Month over the past six months.
As of this moment, the data would suggest that our market is a very “normal” one here in Scripps. The numbers for all of San Diego County, however, tell a little different story:
|
SAN DIEGO COUNTY |
||||
| Property Type |
# Homes Sold in Past Six Months |
Avg. # Homes Sold Per Month |
# Homes Currently Listed for Sale |
Absorption Rate * |
| Detached |
9851 |
1641 |
11981 |
7.3 |
| Attached |
4897 |
816 |
7438 |
9.1 |
Although I have not thoroughly scrutinized this data, I suspect that the condo picture in San Diego County is being heavily influenced by the downtown market. In the case of both single- and multi-family homes, however, it would appear that, overall, we have indeed moved toward more of a Buyer’s market. Whether Scripps is lagging and will follow this county-wide trend or whether we will continue to enjoy a “normal” market remains to be seen.
ABOUT THE AUTHOR Kris Berg is Co-Owner and Designated Broker of San Diego Castles Realty. If not-so static web sites are your thing, go here at once where you will find loads of real estate information including homes for sale, market trends, floor plans and more. Kris's hobbies include fencing and spot welding. She likes kittens. 
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Kris,
We are experiencing a definite real estate slowdown throughout most of San Diego County. Most listings that we’re looking at are overpriced. It seems to us that sellers have not gotten the message. Prices have dropped. As you know, thousands of new agents have joined the San Diego Board of Realtors in the last few years and these new agents have raised expectations of sellers throughout the County. The quantities of listings both cancelled and expired (FAILED) are the highest in several years. Sellers need to stick with or get with a strong experienced agent and “listen up.” The market has changed. They need to accept the fact that they are not going to profit as much as they would have a year ago. Stronger agents can lead, guide, and get the job done. (as long as the sellers are listening)
Steve Roque and Jan Meyer
Hi Steve (and Jan), and welcome to the Blog! So glad you have agreed to join forces with us. I know that you will bring valuable perspective and experience to the forum.
Now, back to business. You are generally correct about pricing, but I think it is worth mention that, in my opinion, even the correctly priced properties are simply sitting longer due to the dramatic increase in inventory. Just because a home doesn’t sell in the first couple of weeks doesn’t necessarily mean it is over-priced. I caution sellers to be patient in this market. With average market times in the 60-day range, a home that sells in less time is “over-achieving”. I know you recall, of course, the early to mid ’90s when six-month market times were not uncommon. So in many respects, I think these still are the good ol’ days.
As a transaction coordinator, I handle the paperwork for a variety of sales across San Diego county from all the agents in the office. Having also been a Realtor for the last six years, I definitely think that we are leaning towards a buyer’s market. I am seeing more and more sellers paying for buyers closing costs or paying for the first year of HOA dues, etc.
I am also seeing more cancelled escrows than ever before. In March, I had almost as many cancelled escrows as I had closed escrows (only one less). Some of these cancellations were the result of a seller blowing out a contingent buyer (which would have never even had their contingent offer accepted a couple of years ago), but most of the cancellations I saw were the result of the buyer walking away for a variety of reasons.