San Diego Market Slow Down - What does it mean?

By your real estate dude

It’s clear to the most casual of observers that the San Diego real estate market has slowed down. You don’t need a PHD in Statistics to figure out that there are a lot more “for sale” signs on the street than there use to be. But, let’s take a look at the numbers for San Diego County just the same.

In August of this year, 2189 single family homes sold in an average of 52 days. In August of last year 2395 single family homes sold in an average of 38 days. So, this year 206 fewer homes sold in August and took 14 days longer on average in order to do it. Similarly, 1070 condos sold in August of this year in an average of 49 days, while one year ago 1225 condos sold in August in an average of 23 days. So, 155 fewer condos sold this year and took more than twice as long on average in order to sell. The bottom line is this. More homes are for sale this year than in 2004. Fewer homes are selling and they take longer in order to sell.

If we boil this down to what it means to you if you’re selling or buying a home, we come down to simple facts. Sellers must come to grips with the change in the market. This means that the average home will probably not have multiple offers competing in a bidding war as we had in the earlier market. It also means that sellers must be more realistic in the pricing of their homes. In the market we have today, pricing a home competitively is the key to getting it to sell in a reasonable period of time. Buyers have more choices and more time. Since they aren’t in the position of having to make offers quickly in order to have a chance at the purchase, they can take their time and look for the home that best fits there needs. Buyers also have some negotiating leverage that they didn’t have before.

So, here’s the answer to the crystal ball question that I know you’re dieing to ask. It’s the “should I hold off before I (buy, sell or whatever)” question. The answer is, “it depends”. Each situation is different. That’s why advice is generally useless when given as a general “rule”. Although the general rule might dictate that you hold rather than selling, your individual situation may require you to sell. The same is true regarding a decision to buy or hold off a while. The best advice I can give you is to talk with your real estate advisor about your specific situation.

In the meantime, I'll leave you with this just in case you’re concerned about the change in the real estate market. The market has slowed down and I know that many are playing the “prophets of doom”. But take it from me, your friendly neighborhood real estate dude, the “chicken littles” of the world are wrong, the sky is not falling.