San Diego's recuperating housing market continues to thrive. So much so that sales actually reached their best numbers is eight years during the month of July. Real estate prices have remained firm and 25,419 homes and condos were purchased last month within Southern California. What that equals is 17.6% increase from June, as well as 23.5% in contrast to one year previous. Sales numbers were only 0.5% less than normal levels for the month of July.
Housing should continue it's upward move through 2013The average sales price was $385,000. This number was exactly the same for the month of June, but the real story lies in the fact that this is an almost 26% increases since July of last year. The average selling price of homes has continually risen (year-over-year) for sixteen straight months. Some attribute the increase to an increase in inventory. Additionally, the increase in mortgage rates which took place a few months ago may have also played a role.It seems that the housing market is continually trying to find its balance again, as many home sellers who were at one point underwater are finally able to realize a profit, or at least not walk away with a loss.
The good news does not extend to everyone, however, as those who own less expensive homes still struggle to sell for a profit. Homes priced between $300K and $800K increased by over 50% last month in comparison to July of last year. For homes priced at $200K or less, there was a 26% drop from July of last year. Weakened sales for this price range were attributed to lower supply, which is likely the result of homeowners not being able to afford to take a loss. Additionally, foreclosure numbers for these homes is less now.
The first half of the year was quite favorable for the San Diego area. Home prices increased and the number of distressed sales dropped considerably. Housing inventory continues to be low, with investor action being high. This sets the stage for continuing growth through years end. However, the trend could be derailed by increasing interest rates. Such a change would definitely slow the market. Fixed home loan rates have climbed substantially within the past couple of months. Affordability has continued to be an issue, for first-time home buyers who are facing increasing interest rates and increasing home prices.
These economic factors could slow the home price appreciation rate for the San Diego area. Even so, ongoing job growth seems to be stirring the development of additional households. When this is combined with the demand which is the result of years of decreased home production, it becomes pretty clear that home values are likely to continue their rise during the second half of 2013.
