Imperial Beach, CA Median Home Value Steadies

The median home value in Imperial Beach has declined 13% over the past year but has steadied over the past 6 months.  The demand and supply is in balance and nearly in shortage with 2 months of current inventory.  The typical marketing time is less than 3 months with an average of 69 days.  56% of all sales (24 out of 43) over the past 6 months were bank sales, there are currently 75 bank owned properties, 88 properties that have received a notice of default but that are not in foreclosure, and 75 properties currently in foreclosure.  Based on an average of 4 bank sales per month over the past 6 months there are 18.9 months of bank owned inventory and 40.8 months of additional potential inventory from homeowners that are 60+ days late on their mortgage and in the foreclosure process..  Based on these statistics, Imperial Beach remains among the most negatively affected in the county by the national housing market crisis and future property value declines are possible.

Stats and Charts Derived from First American CoreLogic Data

San Diego Median Property Value Declines 3.2%+ in November and Has Been Overall Flat Over Past Year

Reports of banks holding inventory, not foreclosing on houses, and not filing notices of default have been troubling me when considering our San Diego, CA housing market.  Especially so because of near constant reporting of how property values are going up, my own statistics that frequently show a scarcity of available properties, the recent sharp increase in multiple offer sales, and the increase in frequency of purchase prices that are above list prices, often significantly.

To try and get a clearer understanding of what is happening with our San Diego housing market, I decided to tackle the macro view of it myself.  In considering what would give me the clearest understanding of what is happening, I decided that excluding bank sales would produce more accurate results.  After all, bank sold properties often include a higher ratio of properties in sub-average condition and can be severely distressed and sold for significantly under-market prices. 

What I found is that when considering the median sales price, San Diego is exactly where it was at this time last year:  $450,000.  San Diego has made no progress in terms of market appreciation.  When considering the median price per square foot, San Diego property values have increased by 4.4% over the past year and are roughly equal to May of this year.

This data seems to suggest that the reports of property value increases could very well be due to a 43% decrease in the ratio of bank sales since this time last year which is also a reduction in distressed sales and sub-average condition sales, not an actual increase in resident-owned property values. 

Please do your due diligence folks and consider these statistics when purchasing properties – and ESPECIALLY consider the number of bank owned properties, properties with notice of defaults filed, and properties in foreclosure in the area.  That is the best indication of the potential for future property value decreases available.  I would of course be happy to help.  And remember, an appraisal ordered by the bank for your purchase is for the bank, not for you – even if you pay for it.  It is generally wiser to get an appraisal BEFORE you make an offer.  I have several options available that can help with your specific need and that can be completed quickly.  Please visit http://www.diegoappraiser.com, call (619) 630-9273, or email brian@diegoappraiser.com.

Regarding bank owned or potentially bank owned properties being held off of the market or hidden from the market, does anyone out there have more insight into this?  I would love to hear from you.  The US government / taxpayers are supposed to be buying up toxic debt and I wonder if that has enabled banks to hold properties and halt foreclosure on some properties without the typical negative affects from non-payment by buyers or the holding costs incurred by not releasing them for sale in the open market.

Thank you for reading through this!  Comments are welcome!

-Brian Ward

Need to find an appraiser in your area?  Visit www.appraiserengine.com.  The website is in beta but contains all active appraisers from the national registry, searchable by the distance from the zip code of the property that needs to be appraised.

Housing Statistics in San Diego, CA Zipcode 92105

Property values have fluctuated throughout the past year but overall values have increased  5.6% which indicates a stabilizing market, not an appreciating market, given the reduction in the number of bank sales in the area compared with a year ago, in my opinion.  The Demand/Supply trend is Shortage with 1.5 months of current inventory.  The marketing time trend has been under 3 months throughout the past year.  29% of all sales over the past month were bank sales and 65% were bank sales during the same period last year.  There are currently 193 bank owned homes, 213 properties that have received a notice of default, and 178 additional properties that are currently in foreclosure with an auction date set.  Based on the number of bank sales over the past 30 days there are 9 months of bank owned inventory and 18 additional months of potential bank owned inventory from properties with mortgages that are 60+ days late.  Based on these foreclosure related statistics, the subject's market area is among the most negatively affected in San Diego County by the recent national mortgage crisis and future declines from foreclosures are possible.  These statistics do not include any properties with mortgages over 60 days late that banks are not filing notices of default on which is an unknown number of properties.

Brian Ward
http://www.diegoappraiser.com

When Will the California Housing Market Hit Bottom? | Westchester & Bronx NY investment property real estate blog

Why wait? Because in some markets there is a tremendous ’shadow’ inventory of homes in the foreclosure process or that are already bank owned that are not on the market. Also, some banks have ceased filing notice of defaults as well which keeps those statistics out of the reach of the consumer. I can only speculate, but it seems like the banks are controlling the inventory to create an artificial scarcity in San Diego (and especially in Riverside county) with the intention of raising or stabilizing house prices. The problem is that in some areas, the number of properties in this ’shadow’ inventory is swelling significantly faster than the absorption rate of properties listed for sale which is creating a potential new bubble that will need to be absorbed at some point. Can the banks hold the banks long enough to keep the bubble from happening? 5-10 years? Who knows. But that is why people are smart to at least consider waiting.

Brian Ward
http://www.diegoappraiser.com

When Will the California Housing Market Hit Bottom? | Westchester & Bronx NY investment property real estate blog

San Diego Foreclosure and Market Statistics, Zip Code 92122

In the San Diego zip code of 92122 the ratio of bank sales has declined to 14% over the past month from 36% during the same period last year.  The ratio of bank sale listings is currently 8% according to the local MLS.  There are currently 39 bank owned homes which would constitute 41% of all listings if all were actively marketed, there are 68 properties that are in foreclosure with the sale date set, and 85 properties that have received a notice of default.  Bank sale ratios are above what is historically typical and sellers must compete with bank sales for buyers, although it is less than it has generally been over the past 2 years.  The property values trend has been stable between the past two quarters and has risen over the past 12 months, demand/supply has been stable over the past two quarters at approximately 5.5 months of inventory, and the median marketing time has been less than 90 days for a year.