Mike Litton Real Estate: April 2012

San Diego Real Estate Market Turning A Corner? Check This Out!

San Diego Real Estate Market Turning A Corner? Check This Out!

San Diego Real Estate Market Turning A Corner? Check This Out!

Is the San Diego real estate market really turning a corner? Well check out the following to draw your own conclusions.

 

In order to try to determine if the San Diego real estate market has really turned a corner, we need to look at a number of factors. Those factors would include relocation activity, home sales for the last 12 months, San Diego's leading economic indicators, vacancy rates, and construction activity.

 

According to Allied Van lines in their most recent annual report, California has become one of the most inbound "magnet" states of the United States. Also, Allied Van Lines indicated that California is the most "mobile state" in the union with the most interstate moves of any state. In 2004 and 2006 California received the distinction from Allied Van lines as the most "outbound" state in the United States in relocation activity. What this means is that more people were leaving the state of California that were coming here.

 

According to Alan Nevin, a principal with the London Group, we are importing 30,000 more people into San Diego County every year than we are exporting. This will drive up the demand if it hasn't already for housing in San Diego County.

 

According to The San Diego Association Of Realtors, San Diego existing home sales have increased year-over-year 10 out of the last 12 months culminating in a 24% year-over-year increase in March 2012. As home sales continue to increase, this will affect inventory levels as the market will continue to absorb more of our current inventory more rapidly. Mr. Nevin indicates that in San Diego County the current unsold inventory is down to the two-month level and he further continues that in some areas of San Diego County properties that are priced 500,000 and below have multiple offers and are selling quickly.

 

According to Alan Gin at the University of San Diego, the San Diego County leading economic indicators have rebounded quite significantly from the low that was established in March of 2009. The current index reads it 118.1 which indicates a 40% plus improvement over that low. Mr. Gin also indicates that in 2011 construction permits increased by 56%.

 

Mr. Nevin indicates that in San Diego County the vacancy rate has dropped to less than 1%. Which is far below what economists indicate is statistical full vacancy. Therefore, it appears that we have a lot more demand currently for rental housing in San Diego County that we have inventory. This demand increase should drive up rental prices which should also put upward pressure and drive up demand on entry-level housing here in San Diego County.

 

Regarding construction activity, Mr. Nevin indicates that we are currently building just over 5,500 housing units here in San Diego County per year as of last year. Considering that were importing 30,000 more people per year than were exporting were simply not building enough units to accommodate that increased demand. According to Mr. Nevin, construction activity has been responsible for the recovery of our economy nine out of the last 11 recessions here in San Diego County.

 

So whether it is improvement in relocation activity, home sales, leading economic indicators, vacancy rates and/or construction activity it appears that San Diego County's economy and real estate market have turned a corner for the better. There is always a chance, and it could be significant, that our economy and real estate market dips into another recessionary trend. For now, anyway, it's looking good so far.

 

As always, thanks for listening.


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Mike Litton, SFR, CDPE, FSP, PSC

Broker/Owner/Realtor

Keller Williams Realty North County San Diego

760-802-9500

reomike@cox.net

www.littonrealtygroup.com

DRE License #01129886

 

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Comment balloon 0 commentsMike Litton • April 23 2012 12:12PM
San Diego Real Estate Market Turning A Corner? Check This Out!
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