Okay, so which news do you want first...The good or the bad?
Let's start with the bad.
The dreaded S&P Case-Shiller Home Price Index, which tracks prices in 20 cities throughout the U.S., released it's November report, and once again the numbers didn't look good. I'll spare you the boredom of reading all the numbers, but will tell you that San Diego experienced another 2.3% drop in prices from October, and a 25.8% drop year-over-year (meaning November 2007 to November 2008). This isn't really "breaking news," however, as this is now the 28Th consecutive month that this report has registered declines.
"Um, hello? I thought you said there was good news?"
Well, there is good news for buyers. The major reason that these numbers look so bad is because an increasing number of these sales over the last year have been foreclosures and short-sales. These properties tend to sell at "bargain basement" prices as banks look to quickly unload their inventory. Add in historically low mortgage rates to the mix and you have a perfect storm for buyers.
"There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of the New York based derivatives firm, Radar Logic.
According to their data, and a recent story in Forbes, real estate transactions in San Diego are up 90% in the last few months as buyers compete for the available bargains. (See video below for more)
We are definitely seeing a lot of first-time buyers and investors jumping back in to the San Diego real estate market. In fact, the majority of our transactions in 2008 were with buyers, and almost 90% of those buyers bought a property that was in foreclosure! These dramatic price drops are bringing affordability back down to earth and savvy buyers back into the market.