North San Diego County house sales and the median price slipped in April compared with last year, when government incentives pumped up the market, according to transaction data and real estate agents.
The median house price in April dipped to $430,000, down 4.9 percent from March and 2.8 percent from the same month last year, according to a North County Times analysis of data from the San Diego County Assessor’s office. Sales slipped to 602, down 15 percent from March and down 20.8 percent from April 2010.
A federal tax incentive expired at the end of April 2010, motivating fence-sitting buyers to jump into the market.
The influx created a frothy market, with bidding wars that pushed up sales and prices.
After the federal and follow-up state incentives ended, prices and sales slipped back to where they’d been before the spring 2010 rush.
This year, high foreclosure rates inland are holding down sales, but buyers have renewed their interest in coastal communities, real estate agents said.
“That tax credit was artificially stimulating the market,” said Paul Cauthen, an Oceanside real estate agent. “(This year) interest rates are low, people are still buying. The motivating factor is prices.”
Interest rates remain below 5 percent, a historic low, and when prices are adjusted for inflation, house prices in North County are the same as during the mid-1990s.
Without the tax credit to attract indecisive buyers, those in the market face less competition and can take the time to buy exactly the house they want, said Gabrielle Preston, a Solana Beach real estate agent.
“We didn’t have clients looking for fixers,” Preston said. “They want finished homes that have been upgraded. They don’t have a lot of liquidity or cash to fix up after they buy.”
Mortgage originators raised their lending standards dramatically in the last two years, and buyers can’t count on getting loans to make repairs, Preston said.
Foreclosures suppressed house prices inland, especially in Valley Center and Escondido.
“(In Valley Center) the majority (of April sales) were bank owned,” said Karl Jokinen, a Valley Center real estate agent. “Very, very few regular transactions.”
In North San Diego County, lenders foreclosed on 1 house for every 1,000 households in April, according to ForeclosureRadar, a San Francisco real estate analyst. That was down 22 percent from last April, but still well above the historical norm of 0.25 per 1,000 houses.
The foreclosure rate in Southwest Riverside County is triple that of North County, and prices have been locked between $200,000 and $215,000 for the past 17 months.
Falling house prices in North County tend to slow sales for Southwest Riverside County, as buyers are able to find bargains closer to jobs in San Diego County.
Amid the falling median house price in April, coastal North County real estate agents said they’d gotten busy and expected a good summer buying season.
“We’ve come out of the winter doldrums, we are seeing the inventory move,” Cauthen said.
North County Times – The Californian | Monday, May 16, 2011