Hundreds of professionals gathered in San Diego for the "San Diego Economic Forum" held July 13 where, in private rooms, top professionals in residential real estate discussed the current happenings of the local market.
San Diego County Tax Assessor, Gregory Smith, and famed, local economist Alan Nevin, spoke to a crowed room in an attempt to make sense of an ambiguous local market.
During the last year, local and national press has penned conflicting articles on the future of the real estate market. For example: Money Magazine's June special housing issue outlined how San Diego is due for a major correction in prices; a July 7 article in the Wall Street Journal wrote that home sales are "trending upward" and that the "housing market is stabilizing"; the San Diego Union Tribune wrote of how thousands are leaving San Diego to flee the rising housing prices and both professionals and homeowners are asking how could a condominium purchased 6 months ago can be worth $75,000 less considering local sales prices are quoted to have increased 5% over the same 6 months.
According to Nevin, who has spent the last 30 years accurately analyzing San Diego's economic trends, the answer is simple.
"The economy is doing very well." Nevin then proceeds to break apart the misleading facts from the Union Tribune regarding residents leaving the area, and outlines the fact that San Diego is "gaining around 20,000 to 25,000 jobs a year."
Nevin backs up his statement by citing that the County's basic jobs are diversified and the largest employers, such as the Navy and manufacturing industry, are software and intellectually current, making them recession-resistant. Nevin also points out that San Diego remains the second most visited destination in the country and that our university system is strong; adding thousands of jobs and bringing students and money from all over the country.
Then why the price decrease?
"Supply of available property affect prices," says Nevin. "Investors have flooded the market in areas such as downtown San Diego, and the local prices are softening amidst the deluge of properties currently for sale."
Nevin says that many of the investors will be weeded out in the next year, and prices may soften as investors shed their units. However, he anticipates prices will snap back as the properties sell and inventory lessens.
In Carlsbad, the sale of residential property has been steady and inventory at manageable levels. Around 55 attached homes and 80 detached homes have been selling per month in Carlsbad during 2006; keeping close to the record sales of 2004 and 2005. With the number of homes for sale, it would take approximately 8 months to sell all the units, in comparison to nearly 16 months of inventory in downtown San Diego. Traditionally, the number of homes for sale increases during the summer months. Those Carlsbad residents that are considering selling must remember that the number of comparable homes will affect their sales price.
Interest rates also have an affect on sales prices as it correlates with affordability. The good news is that the Labor Department released the employment report in June, which outlines the numbers of jobs created. Many expected numbers as high as 175,000 new jobs, but as non-farm payrolls grew by only 121,000, investors took it as a sign that economic growth is slowing down, and that the Federal Reserve may stop or slow raising interest rates.
So, where do we currently stand?
As of July 17, mortgage rates fell for the second week in a row putting the 30 year fixed rate around 6.74, down from 6.79.
San Diego County Tax Assessor, Gregory Smith, and famed, local economist Alan Nevin, spoke to a crowed room in an attempt to make sense of an ambiguous local market.
During the last year, local and national press has penned conflicting articles on the future of the real estate market. For example: Money Magazine's June special housing issue outlined how San Diego is due for a major correction in prices; a July 7 article in the Wall Street Journal wrote that home sales are "trending upward" and that the "housing market is stabilizing"; the San Diego Union Tribune wrote of how thousands are leaving San Diego to flee the rising housing prices and both professionals and homeowners are asking how could a condominium purchased 6 months ago can be worth $75,000 less considering local sales prices are quoted to have increased 5% over the same 6 months.
According to Nevin, who has spent the last 30 years accurately analyzing San Diego's economic trends, the answer is simple.
"The economy is doing very well." Nevin then proceeds to break apart the misleading facts from the Union Tribune regarding residents leaving the area, and outlines the fact that San Diego is "gaining around 20,000 to 25,000 jobs a year."
Nevin backs up his statement by citing that the County's basic jobs are diversified and the largest employers, such as the Navy and manufacturing industry, are software and intellectually current, making them recession-resistant. Nevin also points out that San Diego remains the second most visited destination in the country and that our university system is strong; adding thousands of jobs and bringing students and money from all over the country.
Then why the price decrease?
"Supply of available property affect prices," says Nevin. "Investors have flooded the market in areas such as downtown San Diego, and the local prices are softening amidst the deluge of properties currently for sale."
Nevin says that many of the investors will be weeded out in the next year, and prices may soften as investors shed their units. However, he anticipates prices will snap back as the properties sell and inventory lessens.
In Carlsbad, the sale of residential property has been steady and inventory at manageable levels. Around 55 attached homes and 80 detached homes have been selling per month in Carlsbad during 2006; keeping close to the record sales of 2004 and 2005. With the number of homes for sale, it would take approximately 8 months to sell all the units, in comparison to nearly 16 months of inventory in downtown San Diego. Traditionally, the number of homes for sale increases during the summer months. Those Carlsbad residents that are considering selling must remember that the number of comparable homes will affect their sales price.
Interest rates also have an affect on sales prices as it correlates with affordability. The good news is that the Labor Department released the employment report in June, which outlines the numbers of jobs created. Many expected numbers as high as 175,000 new jobs, but as non-farm payrolls grew by only 121,000, investors took it as a sign that economic growth is slowing down, and that the Federal Reserve may stop or slow raising interest rates.
So, where do we currently stand?
As of July 17, mortgage rates fell for the second week in a row putting the 30 year fixed rate around 6.74, down from 6.79.