San Diego real estate
By Dave Schwab
Recent statistics indicate the Uptown real estate picture is beginning to brighten, although the lower end of the market is benefiting disproportionately.
“It has gone up so much on the lower end,” said Afton Miller, an agent with Coldwell Banker Mission Valley, about the North Park market. “Under $500,000 stuff has gone up $50,000 easily in the last 12 months.”
Miller cited continuing low interest rates as one reason for lower-end appreciation. Another is the “seismic shift” in the overall real estate market since the economic recession kicked in.
“All the prices are lower than they were three years ago, so they can afford to buy,” she noted of buyers, adding North Park and South Park now have a cachet as the “cool” and “in” places to live. “It’s a highly desirable neighborhood because of all the restaurants, bars and coffeehouses and the North Park Theatre that have really taken off,” Miller said.
While prices are “maxing out” in the market’s low end in North Park and South Park, Miller pointed out that doesn’t “reach” to the opposite end of the price spectrum. “The middle and high end has not gone up as much,” she said.
The discrepancy in Uptown’s low- and high-end real estate activity is reflected throughout San Diego County. Figures show the starter-home market at $350,000 is stable and rising as distressed properties leave the market, while the market in higher-end homes at $800,000 and above is languishing, apparently because of job losses and higher-cost mortgages.
Fourth-quarter changes in median housing prices in 85 ZIP Codes countywide were mixed, with prices up in 40 zones, down in 41 and unchanged in four. Results in Uptown were similar. Hillcrest/Mission Hills had the third biggest overall increase. Normal Heights/Kensington increased some. North Park decreased.
But statistics don’t tell the whole story, said Francisco Yescas of Coldwell Banker Residential Brokerage, an agent brokering single-family homes and condominiums in Uptown.
Yescas said North Park and the other areas he covers have one thing in common. “Inventory is tight, there’s just not a lot available,” he observed, adding the recession, while initially “downsizing” market prices, has not caused homeowners to reevaluate their price expectations. “People think they can go back to 2005, that $300,000 that was on the table then should be on the table now,” he said, while adding, “It was just paper money.”
Nonetheless, Yescas said recent signs in the Uptown real estate market are encouraging. In North Park’s 92104 ZIP Code, for example, Yescas said sales comparing 2008 to 2009 increased from 46 to 64, as did the average price per square foot, going from $359 in 2008 to $378 in 2009.
Houses are also starting to sell faster in the area, decreasing from an average of 49 days in 2008 to 41 days in 2009, he said.
More encouraging, said Yescas, is the Obama Administration’s economic stimulus package, which holds out the hope of further boosting real estate sales volumes with the extension of incentive programs offering up to $8,500 to first-time buyers, and a $6,500 credit to move-up buyers who have not purchased a home in the last five years.
A worsening unemployment picture could discourage market activity, but Yescas noted that is being counterbalanced by interest rates below 5 percent again, which should have the opposite effect. “It’s something of a no-brainer,” he said. “If someone is looking to move up in location, this is the time to do it.”
Yescas said a “quickening” real estate climate could stimulate sales. “I expect more people to move from condos to houses and people that have two-bedroom houses to go to three-bedroom houses and to switch ZIP Codes,” he said.
Though sagging employment encourages home buyers and sellers to “hold their cards to their chests” in the near term, Yescas believes those with a longer time horizon should be encouraged by prospects for a real estate rebound. “Unless another 9/11 hits, if you’ve got something more than a five-year plan, you’re going to be fine,” he said, adding sales growth will more than likely be positive with “reasonable increases” in price in the near future.
In the foreseeable future, growth in the Uptown real estate market will depend on banks’ home-loan policies. “A lot of it will have to do with what Wall Street does – or doesn’t do – with loans,” Yescas said. “Right now, any loans over $1 million are not being packaged. Nobody wants to carry them. They’re (banks) not letting go of the money, and if they are, they’re charging exorbitant (interest) rates.”
Yescas added the recession has caused a “fundamental shift” in the public’s perception of what’s affordable. “Anything under $500,000 or $600,000 is affordable for San Diego,” he said.