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San Diego Detached Home Sales for March Lag State, Report Finds

While median home prices are increasing statewide year over year, San Diego is not so fortunate.

The California Association of Realtors’ March report found that the median price of a single-family detached home in San Diego decreased 0.2 percent from March last year. Statewide prices increased 3.2 percent for the same time period.

The median price of an existing single-family detached home in the state in March was $580,090, a 3.9 percent increase from February.

While San Diego’s median price is higher than the state, the month-over-month increase was less. San Diego median prices increased 2.1 percent in March to $605,950 from February.

Despite the drop, David Cabot, president of the San Diego Association of Realtors, saw positive growth in the report.

“This is not the doom and gloom many see,” he said.

Cabot pointed out a 35.4 percent increase in number of sales in San Diego in March from just one month earlier. The state saw an 8.1 decrease for the same time period.

In addition, the state saw a 20.8 percent decrease in single-family detached home sales last month from March 2006, while San Diego saw a 19.7 percent decrease for the same period, according to CAR.

“Year over year it is very similar, but month to month San Diego is up,” said Cabot. “The change from February to March was dramatically up.”

He said sales numbers tracked down in San Diego slowed last year after the first quarter.

“So the fact that March of this year was lower than March last year shouldn’t surprise anybody because March of last year was pretty much the high point,” he said. “But the fact that March of this year was better, significantly better, than February of this year is an important factor and that shows the market of San Diego was dramatically better in March than February. And that is an encouraging statistic.”

Colleen Badagliacco, president of CAR, said the year-over-year decline in March was larger than in recent months in part because sales in March 2006 were the strongest in all of last year in the state as well.

“March sales fell below the levels of recent months in reaction to an uptick in mortgage rates earlier this year along with tighter underwriting standards,” she said.

In addition, Badagliacco said recent news about foreclosures and the subprime situation had an adverse impact on the market psychology of many buyers, which lead some to delay home purchases.

Kris Berg, a broker with San Diego Castles, the Scripps Ranch office of Prudential California Realty, said CAR’s March report should look similar in future months.

Berg, who admits she has a less rosy outlook on the market than both the national and state realtor groups, expects April’s numbers to hold steady.

“I would expect April to be flat or even down some as well,” she said.

She also anticipated that this slow or declining trend will continue for the rest of the year.

What has changed is that the spring real estate season has not picked up as it usually does, according to Berg.

“This spring has been different than past springs because we haven’t seen a lot of the typical seasonal things we usually anticipate. We haven’t seen a huge increase in inventory and we haven’t seen a ton buyer of activity,” she said.

She sees a significant slow down in buyer activity in entry-level purchases. High-end properties in San Diego tend to hold their value better than their lower-price counterparts because that market is naturally less affected by interest rates and tightening of lending standards, according to Berg.

“What we are seeing is that the tighter standards are having a significant effect on the lower price entry-level properties. We have a diminished buyer pool for those homes and that is largely due to the lending issues going on right now,” she said.

Berg expects that diminished buyer pool coupled with high median prices has created a “trickle up effect” on markets of all price ranges. She said if typical first-time home buyers can not sell their condo, in turn they can not buy into the single-family detached market.

“We were starting to feel it a year ago and now it is becoming really clear it is a reality,” she said.

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