Six Things You Must Know Before Deciding to Buy or Sell a Home in California This Spring.

Six Things You Must Know Before Deciding to Buy or Sell a Home in California This Spring.

San Diego Real Estate Market Update - January 2014

The Good News, The Bad News and Where are We Going From Here?

   The January 2014 real estate numbers are in for California and San Diego.

   Even the negative news is not really negative when we compare the recent median home price decline with California's and San Diego's historical statistics.  The market continues to be strong, as the real estate rebound and market recovery continues for San Diego and California.

In This Blog:

1. The median home price for California decreased 6.2% from December 2013 to January 2014; down 0.1% in San Diego; a 9% decrease is typical for California for this same period.
2. January 2013 to January 2014, the median home price in California rose 22.1% from $336,650 to $410,990; up 21.8% in San Diego (24.5% for San Diego condos).
3. 23 consecutive monthly increases year-over-year; 19 of those months were double-digit increases.
4. Home prices in San Diego and the U.S. are still discounted from their pre- Great Recession" levels. 
5. All three major stock market indices are approximately 60-80% higher than their pre- "Great Recession" levels.
6. California Home Prices were still 23% off their highs from June 2006, as of September 2013 .

The Negative News

   There is no doubt that real estate sales and median prices in California and San Diego did, in fact, decline from December 2013 to January 2014.  However, when we look at state-wide numbers and San Diego's historical numbers, we will see that the real estate market remains strong.  

   On average, for the last 6 years, the California median home price typically falls about 9% from December to January.  

   In San Diego County, from December to January, the median price for single family homes was down only 0.1%.  Statewide, the median price for California single family homes decreased only 6.2%.  California's December median price of $438,090 fell to $410,990 in January 2014.  

   When commenting on this decrease, the Vice President of California Ass. of Realtors and Chief Economist Leslie Appleton-Young stated the following:

“The decline in the January median price [for California] was the largest in a year but is typical between December and January, with that decline averaging nearly nine percent over the last six years.” 

   Comparing California's 6.2% decline this year with its typical 9% decrease, the California's real estate market continues to show strength.

   Specifically, comparing January 2013 to January 2014, the median price in California rose 22.1% from $336,650 to $410,990.  This makes 23 consecutive months of increases year-over-year; 19 of those months were double-digit increases year-over-year.  

   Single family homes rose 21.8% in San Diego from January 2013 to January 2014.  Condos rose 24.5% during that same period.

The Lack of Supply of Homes on the Market - Increased only Slightly.

   The supply of single-family homes rose in January to 4.3 months.  This is an increase from December 2013 where there was a 3 months supply.  A supply of 6 to 7 months is considered normal or typical.  This shows a lack of inventory, which is likely contributing to the lower number of sales, both for California and San Diego.

Comparing Home Prices - Then and Now - Still Discounted from their Peak.

   Home prices in San Diego and the U.S. have yet to return to their pre- Great Recession" levels.  From the graphic below, we can see that California is still 23% off its peak prices.  But, as we can see from the charts below, all three major stock market indices are approximately 60-80% higher than their pre- "Great Recession" levels.  

   This also is a good indication for continuing strength in the real estate market.

San Diego, CA - Home Price Index

California - Home Price Index

California 23% Appreciation from Sept 2012 to Sept 2013

Home Prices are Still Discounted from 2006

   While median home prices rose 23% from January 2013 to January 2014, they are still 23% down from June 2006.

Comparing The Stock Market - At All-Time Historic Highs.

   Comparing the stock market figures, you will see that all three major indices are currently trading at all-time historic highs, whereas home prices are still rising off their hugely discounted lows of 2009.  Looking at the stock market charts below, you can see the recent volatility, during the months of January and February.  The DOW, S&P 500 and the Nasdaq, at their peaks, seem to be deciding whether to correct downward, as investors take their profits or whether to steam upward.

   All three indices are approximately 60-80% higher than their pre- "Great Recession" levels.  Again, whereas the median home prices are still climbing to their pre- Great Recession" levels.

Stock Market - Major Indices

Dow Jones, S&P 500 and Nasdaq One Year Chart - SHOWING VOLATILITY AT THEIR PEAKS.

Dow Jones, S&P 500 and Nasdaq Chart since 2001 - AT HISTORIC HIGHS.

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Mark Harbaugh, J.D. has been a licensed REALTOR® in California since 1998.  He is a real estate Broker, holds a Bachelors Degree and a Law Degree.

Since 1998, Mark has been providing expert representation to buyers and sellers of homes, condos, multi-unit properties and multi-million dollar estates. 


His clients include friends - old and new - colleagues, professional football and basketball players, original founders of Fortune 500 companies and other high-profile personalities, who value their privacy and anonymity.  Mark has also consulted Nationally and Internationally with many interested in buying and selling real estate.

Mark can be reached at 619-246-2860.

Email: markonthemark@gmail.com

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