Increased Inventory and Lower Interest Rates Helping Market Conditions
While the first few months of 2014 showed lackluster results for the national real estate market, industry experts are confident that conditions are now looking up. According to the National Association of Realtors' recently released numbers, existing-home sales increased by 1.3% between March and April. Much of this gain has been attributed to strong markets in the West and the South, and a nationwide increase in the total number of homes listed for sale.
The NAR report also shows that distressed home sales – which include short sale and bank-owned properties – are also on the decline. In April 2013, they made up 18% of all transactions. A year later that figure is down to 15% and expected to continue to shrink as the healthy market and growing home values aid homeowners who had previously owed more than their homes were worth.
This spring's lower interest rates are also helping to fuel housing sales, as the average rates for both May and June remain the lowest we've seen since last fall. After topping 4.5% earlier in the year, rates have settled back down to an average of 4.26% this month. While not a major decrease, these lower rates have encouraged many potential buyers to take advantage of current opportunities before rates and home values rise any further.
San Diego Property Values Continue to Climb in 2014
Recent figures look even more promising for the San Diego real estate market. While the average number of active listings in May matched the peaks seen last year, June has brought a much higher level of inventory. The number of San Diego homes for sale in June has grown nearly 12% over May's figures, to an average of 7,554. This is the highest we've seen locally in years, showing that more and more homeowners are realizing that the current increased home values and buyer demand makes for a great time to sell.
Perhaps part of the reason that more properties are beginning to come to market is the fact that both April and May showed a massive increase in sold homes compared to the gloomy wintertime results. After dropping to just 1,769 transactions in January, May's sold listings are over 70% higher at 3,015. This increased volume has also helped to bring down the average number of days listed properties sit on the market. For single-family homes in May, that figure stood at 42 days – matching the historic lows seen during last year's heightened market frenzy.
Locally, the median sales price for detached homes has also continued to rise. The median price for single-family San Diego homes for sale continued to increase in May to $499,250 – the highest value seen in years. Many interpret this as a promising sign that the San Diego real estate market will continue to see healthy growth throughout 2014 and well into 2015, albeit at a slower pace than has been experienced over the past year.
San Diego Real Estate Market Statistics for June 2014