San Diego Real Estate Market Outlook

In the San Diego real estate market the trends are showing the market is moving into a neutral market with increasing inventory, less demand, slow increase of prices and supply growing. In 2009, the market cooled down much like was expected. Now, the 2nd quarter of 2010 we are a bit ahead of the 2nd quarter in 2009, however, June is showing sales are declining which is opposite of last June. Pending activity is going slower as well. June pending sales are lower than the average pending sales of April and May and July is already running 17 percent below pending sales in June. This lull is still happening even though low interest rates are available, so something else must be in the pot. One speculation is that the tax rebate program ended on April 30 may bring sales forward as does incentive programs. The prices increased over the last year, which more than likely made it impossible for first time buyers.

Lower priced homes as well as neighborhoods with lower priced homes are being ignored, Central San Diego Coastal and North County Coastal with homes selling on average in San Diego for $764,000 and North County on average at $640,000 increased sales. Homes under the $200,000 market are declining and this past year this segment lost 25 percent in market shares, which dropped to 20% of total sales. The real estate market in San Diego is experiencing a new trend of reduced market share for foreclosures. The last year foreclosure sales lost 41 percent of the market share, which declined from 34% to a larger decline in June of 20% of the total sales. During this time period, short sales increased from 21% to 26% in June.

With these trends in motion, we will see a forward impact on the average and median prices. Each year we see demand soften it is just being seen a bit early this year.

All of these demand trends have and will continue to have going forward an impact on the average and median prices. Normally, demand softens in the early Fall so it is coming early this year.

Inventory is expected to grow and since the demand is soft the months supply will continue to increase. This will allow the prices to reduce as the pressure will be off and we can slowly slide into a neutral market.

At this time in San Diego an 1100 square foot home sold for $256,000 in June of 2009 and in June of this year sold for $302,000, which was an 18% increase. Prices are slowly increasing, but we are noticing a month over month reduction in the price increases.

California Video Game Law Being Reviewed

The law never even made it out of the starting gate after being signed by Governor Arnold Schwarzenegger, which prohibited the sale or rental of violent video games to anyone under the age of 18. The Supreme Court is in the middle of the battle between the laws protecting children and the free speech rights to decide if the state of California can ban the sale or rental of violent games to minors.

Not only will the ban keep minors from purchasing violent video games, but also developers and game manufacturers will have to create strict labeling. If the law goes into affect, Retailers could face fines of $1,000 for every violation.

Governor Schwarzenegger stated, “We have a responsibility to our kids and our communities to protect against the effects of games that depict ultra-violent actions, just as we already do with movies,”

Opponents of this law state there are already ratings systems on video games and that parents should be the deciding factor on which video games their children should purchase and play. The Entertainment Software Association states the video games are an expression, which is protected by the First Amendment.

This case comes after a strike down to a federal law banning videos showing animal cruelty. This case is using some of the same free speech concerns even though the state is aiming to protect children instead of animals.

Michael D. Gallagher, president of the Entertainment Software Association stated, “we are hopeful that the court will reject California’s invitation to break from these settled principles by treating depictions of violence, especially those in creative works, as unprotected by the First Amendment.”

California state senator, Leland Yee, wrote the video game ban and explained that the Supreme Court “obviously does not think the animal cruelty ban and the violent game ban can be compared”. He also stated, “Clearly, the justices want to look specifically at our narrowly tailored law that simply limits sales of ultra-violent games to kids without prohibiting speech,” “Clearly, the justices want to look specifically at our narrowly tailored law that simply limits sales of ultra-violent games to kids without prohibiting speech.”

California lawmakers approved the law based on studies suggesting violent games can be linked to aggressions, desensitization to violence, anti-social behavior, and aggression in children. Judge Consuelo Callahan stated, “None of the research establishes or suggests a causal link between minors playing violent video games and actual psychological or neurological harm, and inferences to that effect would not be reasonable.”

Foreclosure Relief Becomes Law

News Alert: Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

This week, the State Legislature enacted foreclosure reform law to address the adverse effects of high foreclosure rates in California. The new law requires lenders to contact homeowners to explore options for avoiding foreclosure at least 30 days before filing a notice of default. It also requires owners acquiring property through foreclosure to maintain the exterior of vacant residential properties. The new law also extends from 30 to 60 days the time for residential tenants to move out of properties that have been foreclosed upon, unless other laws apply. These requirements will remain in effect until January 1, 2013. The full text of Senate Bill 1137 (Perata) is available at www.leginfo.ca.gov

It is really too bad that it has taken our government so long to react to such a huge problem. I know they don’t want to take ownership of the Foreclosure Tsunami that we have all seen take place over the past few years but let’s face it if they had not allowed these Subprime deals to happen in the first place then we would not have this problem today!

Many San Diego Real Estate investors and first time home buyers are really starting to make some great deals on properties in the San Diego County Real Estate Market as they are in many markets around the country. I just feel sorry that so many people have gotten hit with such a huge problem and it has taken our so powerful government so long to react!

IMHO they are the true cause after all they are here to protect us correct.