The Housing Chronicles Blog: San Diego Economic Forecast Conference - Residential Real Estate

Wednesday, September 21, 2011

San Diego Economic Forecast Conference - Residential Real Estate

As part of its ongoing association with Beacon Economics, MetroIntelligence authored the residential real estate section for the recent San Diego Economic Forecast Conference, which took place on September 20th at the Hilton San Diego Bayfront Hotel.

If you'd like to read the section in its entirety, as a service to current and potential clients, we've made it available for free on our Web site (a $175 value). So next time you have consulting needs, please be sure to contact us to discuss how we can help. Don't be shy!

Please also register on our Web site to keep updated on future reports and presentations.

Click here to download the report.

Click here if you'd like to register for updates.

Here were some of the major findings from our report:

  • Falling home prices in San Diego County have made them much more affordable, with 52% of households able to buy the median-priced home at current interest rates, up exponentially from the mid-single digits noted from the last half of 2004 through the end of 2006.
  • While tax credit programs did help the S&P/Case-Shiller Index to recover some of the losses in home prices noted between 2006 and 2009, since their expiration the index has been slowly declining, hovering close to levels last noted in the last quarter of 2009.
  • Although slowly recovering, new home sales remain quite depressed as they continue to compete with discounted foreclosures and short sales, with prices softening to $447,166 following the expiration of the tax credit programs of 2009 and 2010.
  • While sales of existing homes are still down by 45% from their 2003 peak, over the last 18 months they’ve continued to range from 5,500 to 5,900 homes per quarter; prices are up by about 11% from the lows of early 2009 but have softened in recent months to about $360,000.
  • After staging a minor rebound in early 2008, sales of condominiums have again softened to about 2,600 sales per quarter as first-time buyers look instead for single-family bargains; after falling by nearly 50% since the 2006 peak, prices have rebounded moderately but continue to range from $210,000 to $225,000.
  • After several years of struggle, the local apartment market is definitely on the mend, with vacancy rates slowly trending down towards 5.0% as quarterly rent hikes have bounced back into positive territory and are projected to continue rising by 0.7% to 1.0% per quarter.
  • Both default and foreclosure activity is trending downwards, with defaults – often the precursor to a foreclosure – at the lowest levels seen since early 2007.
  • After experiencing considerable declines, building permits are slowly rebounding. Most of the single-family activity is taking place in the outlying areas of South Bay and North County, whereas most of the multi-family activity has been noted in the City of San Diego, Escondido and Chula Vista.

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