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Home Prices in San Diego County for the month of October were higher than the same month in the previous year for the first time in more than three years. The increase was very minimal, and may be only temporary, but experts say that its indicative of a stabilizing market. The median sales price of $325k was unchanged from the previous two months, but was $1,500 higher than in October 2008. It was the first year-over-year increase since June of 2006.

The increase comes on the tail end of a dramatic freefall in home prices, from May 2008 to May of this year, when year over year declines in home prices were more than 20 percent. January saw the biggest decline at almost 35 percent. Economists generally look at year over year numbers instead of monthly trends because they aren’t affexted by seasonal factors. The median sales price over that 13 month period, in all, fell from $380k to $280k before starting to go back up. 

Experts say that various programs from the federal government have been a huge help in stabilizing the market. With interest rates at or near record lows, affordability is higher than it’s been for quite some time. When scores of lending agencies were failing because of subprime mortgage defaults, the government stepped in, insuring loans and raising limits to spur home buying. Also, mortgage giants Fannie Mae and Freddie Mac were taken over by the government. Congress passed and recently both extended and expanded a tax credit for tax payers who buy a home in order to encourage on-the-fence people to buy.

Analysts say that the new-found stability for home prices id precarious at this point. A new wave of foreclosures or a spike in interest rates could cause prices to plummet again. Plus, it is uncertain how the market will react when the federal programs are closed next year. Sales, say analysts, are a more telling factor in the health of the market than prices. October saw 3,670 home sales in San Diego County, up more than 6 percent from September and 2 percent from last October. October typically brings a drop in sales from September.

Large numbers of distressed properties have been a factor in increased sales, as first time buyers and investors try to outbid each other on discounted properties. Almost 35 percent of homes sold in October had been foreclosed in the previous 12 months.

Analysts are hoping that the new expansion of the federal homebuyers tax credit will boost sales of higher priced homes, a real key to a sustained housing recovery. Sales in this area of the market have remained low because it’s difficult to get financing and sellers have not dropped asking prices, preferring to hold on to their properties until a recovery is at hand.

The number of distressed properties on the market does seem to be tapering off. But as unemployment continues to rise, it is unknown whether a new wave of foreclosures will hit as jobless homeowners struggle to get their mortgages modified and save their homes. According to the San Diego Association of Realtors, there are currently just under 8,300 active listings and 6,350 listings in pending mode.

About the Author:

Ruth Mills began her real estate career in La Jolla in 1976. She has consistently remained one of Prudential's top agents in La Jolla. Her website features
insight into the La Jolla real estate market and intant access to
La Jolla homes and La Jolla condos.

Article Source: ArticlesBase.com - San Diego Home Prices Showing Signs of Stabilizing

Avoid Foreclosure - Short Sale Specialist in San Diego

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