So We’ve Heard
This week from MSNBC - Believe it or not, the real estate market is slowing. NO! Say it aint so! San Diego County got the honors in the primary photo, with the caption pointing out that for the first time in six years, year-over-year prices fell in June, while the article reminded us that inventory and market times have climbed significantly.
Sometimes it’s just no fun being right. We (the real estate agents who pay attention to silly things like market trends and interest rate fluctuations, and who listen to what the buyers and sellers are saying) have known this was coming for months or, dare I say, years. No one has wanted to hear it and few have chosen to believe it, but we have been, are, and will continue to be in a correcting market. Everyone presumably understands the concept of cycles, so why should it come as a huge surprise that prices are retreating after six or more years of insane appreciation?
As one who lives and breathes this stuff (often to the detriment of my family and their basic needs, such as regular meals and clean clothing), I didn’t need the media to tell me last year that our market was heading for retrenching. That was apparent to me just by looking at the low down, riskier loans that the majority of buyers were opting for to allow them to afford their home purchase, by considering the potential impact of rising interest rates or even the threat, by observing both buyer and seller mentality during the process. Similarly, I haven’t needed the media to tell me that our local real estate market is now losing steam. Just by looking at the reasons that the sellers in our transactions are selling, the reasons the buyers are buying (or not), and the nature of the contracts (so many seller concessions, as the article points out, that are not generally being disclosed), agents began feeling this declining market months before the media made headlines out of it. And for the record (and perhaps the gazillionth time), our market is not terrible, but simply changing and different than we have been accustomed to since the late nineties.
So, stats time! Here are the links to updated market data for San Diego County and the I-15 Corridor communities. I’ll pay a back-to-school tribute in a week or so with updated year-to-date graphs. Oh boy - Something to look forward to!
SAN DIEGO, SCRIPPS RANCH, RANCHO BERNARDO(92128), MIRA MESA, RANCHO PENASQUITOS, POWAY and (drum roll) introducing 4S RANCH(92127).
August 28th, 2006 at 10:13 am
Unfortunately, emotions (like denial) sometimes get in the way of the objective thinking process. It’s natural. It was, indeed, apparent as early as last August that the market was starting to slow down. We were sending this message to our clients and anyone willing to listen, but no one wanted to hear it. It’s a simple supply and demand cycle and both indicators started to reverse from their 6 year run at that time. What is interesting is that lately we are seeing, at least in our little world of the I-15 corridor, that the number of listings has settled in at about a 6-7 month absorption period. With sales down around 20-30% from last year, I might have expected to see listings continue to climb, but they are not, at least at the moment. Equilibrium? Not quite. More “flushing” is necessary. But buyers are out there and the demand pool is building. They are just waiting for what they perceive to be the right time to pull the trigger. How do I know this? Again, in my little world, at every open house I hold, multiple potential buyers are coming in and flat out telling me this. It’s the American Dream and they will not be denied. It’s just a matter of time.
August 31st, 2006 at 12:22 pm
I enjoyed reading your post. Your graphic is perfect.