The boom in rates of new San Diego houses seems to be near its end. San Diego foreclosures were up by 600 per cent, its highest point, in over 25 years.
The slump in San Diego properties means that fewer homes are changing hands each year. At the start of the housing boom in the 1990s, 4 per cent of San Diego homes were sold annually. However, in April 2007, the number of homes that changed hands was less than 2 per cent.
San Diego California realtors say that the inventory of unsold homes is much higher than last year, and they warn that the figures will go up for the remaining of the year. Real estate agents say that because of the slump in prices of San Diego homes, more homeowners are holding onto their homes, waiting for prices to go up again.
The slump in the housing market also reflected on the prices of homes. The average price of a San Diego house went down from $604,250 in 2005 to $601,760 in 2006. However, the price of San Diego north county homes continued to hold tight. The median price of these homes was higher than the average for the county. The median price of a property in this area was $635,000.
San Diego California realtors are also expecting to see more foreclosures for the remainder of the year. According to recent data, more than 10 per cent of the 700,000-to-750,000 mortgages in San Diego County are of the sub-prime variety. Further, more than 13 percent of the sub-prime loans are in 60 days arrear.
Research also indicated that April was the worst month for San Diego homes as it had the highest number of San Diego foreclosures. More than 1,707 houses and condos were foreclosed during the first four months of 2007, compared to just 238 in the first four months of 2006.
Due to the slump in the housing market, San Diego California realtors are offering larger incentives to homebuyers. In some cases, realtors are offering to bridge loans to buyers until they are able to sell their existing homes. The backlog of unsold homes has risen more than 43 percent in the last year.
Most San Diego California realtors think that the slump in the housing market is temporary and that it will be turned around quickly.