I have checked out several sources of statistics and they all seem to be close to the following provided from www.rereport.com by Rick Campbell. Let’s take a look at the numbers from last month:

Inventory of single-family, re-sale homes was down for the fourth month in a row. It dropped 7.1% compared to last May. Pending sales rose 3.1% from April, and were up 16.7% year over-year. This is the sixth month in a row pending sales have been higher than the year before. Closed sales were off 1.5% month-over-month, and down 16% year-over-year. This is the eleventh month in a row closed sales have been lower than the year before. The median price for single-family, re-sale homes inched up 0.3% from April, but was down 3.9% compared to last May. This is the fourth month in a row the median price has been lower than the year before.


So, this is how I see what these numbers tell us:

First, inventory is down buy 7.1% and the median price is down by 3.9% from last May. Decrease in inventory usually creates some upside on price, especially in central San Diego where inventory always seems to be lacking. So, demand must also be down to create this year-over-year continued price decline. Demand is still being negativity effected by tight money and fear of an even deeper recession (or at least a lack of much indication of economic recovery).

Now let’s take a look a pending sales to closed sales. Normally, pending sales are the main indicator of future closed sales. Pending sales were up 16.7% year over-year but, closed sales were down 16% year-over-year! Usually there is only a few percentage points or even fractions of a percent difference in these numbers. The month to month difference can be due to long escrows for short sales, delays in banks closing on REO inventory as well as financing difficulties. However, the year over year difference being 16% has to be mainly attributed to financing issues.

Lenders have really buckled down and things needed to be tightened. But, it really seems the pendulum has swung too far in that direction. Of course, this is not all caused by the tightening of money by lenders. Buyer’s financial situations shift drastically much quicker then ever before which is also often a factor in the deal not getting closed. Loss of a job or even slight cutbacks in hours can change everything. We will discuss financing issues further in a future article. Let me know your thoughts.

I am getting long winded here so I will wrap this one up and we can continue this discussion next time. What these numbers say to me is this is possibly the best market for buyers, investors (who qualify for, know how to get, or have money) ever in San Diego and most other markets. We will discuss why next time!

I would like to welcome you to our blog. I say our blog because I plan to have many people who contribute to the blog as well as feedback from our readers. My name is Mark Kunce and I have been involved in Real Estate in one way or another most of my life . I am currently an agent with Keller Williams San Diego Metro in Hillcrest. Our offices are located just above the Landmark Theatres in the Uptown Complex. Stop by and see us sometime. I have spent the past four years mainly dealing with distressed properties; bank or investor owned properties known as REOs (Real Estate Owned), short sales, investment properties and investors. I am also a real estate investor.

In this blog we will focus on what I consider the Heart of San Diego which is the Hillcrest, Mission Hills, Bankers Hill, Downtown, University Heights, Normal Heights and North Park areas. In order to do this we will look at these areas in relation to national, statewide, regional, county and city market trends and conditions.

Many people are experiencing personal negative impact as a result of an economy in turmoil. Many people look at this as a time of hardship and despair.  However, I see it as one of the greatest opportunities in Real Estate investment there has ever been. It is a time when through short sale or foreclosure many will find themselves in a rebuilding period hopefully with the opportunity to start again, to start over in a real estate environment which makes more since than it has for many years. It will take time and effort but over the next few years there will be many opportunities emerge for everyone.  Real Estate investors over the next three to five years are going to be able to take advantage of these opportunities like no time in the past 75 years.

I believe every real estate transaction should be thought of and analyzed as an investment. Whether it is a loft, condo, single family home, multiple unit complex, a warehouse-whatever it should be considered an investment. I often have people say to me “But, Mark, this is our home. We live here that’s different.” No it is not! It is property, real property, real estate. It is an investment and you have to treat it as an investment. We will discuss this more in depth next time as well as why the next three to five years are going to be the best time in our lifetime to invest in Real Estate. See you soon.