Home sales continue to remain strong as buyers and investors compete for available San Diego real estate inventory.

The number of single family homes sold in June, as compared May 2012, as well as condos/townhomes, remained unchanged according to the San Diego Association of Realtors.

More profound however are the 2012 June sale numbers compare to 2011 June sales.  Single family home sales rose dramatically 21.2% and condos rose 3.2%.  This is encouraging news for the San Diego real estate market.  This rise in sales represents more confidence amongst buyers and is also reflective of a smaller inventory throughout San Diego County. 

Comparing pricing from June 2012 to May 2012 single family homes were up 2.6% and condo’s fell to 2.2%. 

Year to year, June 2012 to June 2011, single family homes rose 3.3% while condos rose 2.7%.

Low inventory continues to be a key factor in increased sales and pricing.  According to the San Diego Association of Realtors, San Diego’s inventory is at a 2 ½ month supply. A normal, healthy supply is 6 months.  With the numbers dipping below the 6 month mark, many communities throughout San Diego, can now be considered to be in a sellers market.  Most homes priced below $500K are receiving multiple offers and sell for higher than their list price.

 Much of the low inventory “crisis” can be contributed to high demand, driven by historically low interest rates, a lack of confidence in move up seller’s and slower foreclosure times on behalf of many major banks.

One thing is for certain, there really has not been a better time to reach for a piece of the American dream to own your own home.  Low interest rates make it more affordable to own, rather than rent in many situations.  However, put on some comfortable shoes and get ready to work hard as you’ll find yourself competing with thousands of other San Diegan’s and often in bidding wars with 7 or 8 people, sometimes the upward of 30 other offers, for “killer” deals.  Hang in there though as it will be worth it!

Home sales continue to remain strong as the summer selling season descends on San Diego.

Compared to April 2012, May sales for single family homes were up 8.4%.  Condo’s were up 1% compared to April according to the San Diego Association of Realtors.

Comparing pricing from May 2012 to April 2012 single family homes were up 4.1% and condo’s rose dramatically to 9.5%. 

Year to year, May 2012 to May 2011, single family homes remain relatively unchanged while condos rose 7.2%.

Low inventory continues to be a key factor in increased sales and pricing.  According to C.A.R. Vice President and Chief Economist Leslie Appleton-Young “inventory levels have not been this low since December 2005.”  Statewide single family detached home supply dropped down to 3 ½ months in May a 0.7 decrease from April.  Year to year, housing inventory was down 5.7 months.  Historically a 7 month supply is considered normal for the state. 

Interestingly, building permit requests are the highest they have been since September 2008 according to a recent government report released Tuesday and reported by CNN.com.  Building permits are an important statistic to monitor as they represent not only future housing opportunities, but future job growth.    Job growth is something we all can agree is paramount in the recovery of our national economy and ultimately, our housing market. 

Historically low inventory and very high demand are edging San Diego’s real estate market off the bottom.  This could very well be the beginning of a very gradual upswing in San Diego’s marketplace.  This spring most local real estate agents have noticed an increase in demand benchmarked by multiple offers.  Personally, since January I have not written an offer on a property, nor listed a property, that did not have multiple offers; sometimes as many as 30 or more on one home.  Furthermore, most contingent short sales in the MLS, also have gained an offer or two behind them as agents struggle to find their clients a home.  (Contingent listings are more often than not, short sales with accepted offers pending lender approval.)

For the most part, much of what is driving multiple offers is an abnormally low inventory in San Diego’s real estate market.  Some areas are down as much as 60% from last year!  Investors create a huge demand on the lower end of the market, both flipping and holding onto these properties.  Yet repeat and as well as first time home owners also compete for a piece of the San Diego pie.

Many experts cite the lack of new home building, coupled with banks trepidation to foreclose on homes, as what is keeping homes off the open market.   Secondly, many existing home owners who are not in financial crisis, despite the fact that they maybe underwater, are not choosing to sell their homes for obvious reasons.   These two facts alone, I predict will keep the housing inventory low in San Diego for months to come.

However, the same factors that depressed our San Diego Real Estate market just a few years back continue to lurk.  Our housing market will not truly recover until job growth rebounds and our economy stabilizes.  I would also point out that election years tend to be good years for the economy.  The real “tell tell” will be where we are a year from now.  However, as one client once pointed out to me, “Tami, we won’t know where the bottom is until we have started to climb out”.   Based on his careful and simple observation, this could very well be the moment just past the bottom.