Q: AFTER A SLOW 2014, DOES THE MARCH JUMP IN SALES MEAN THAT SAN DIEGO COUNTY WILL HAVE A PEAK REAL-ESTATE SEASON THIS YEAR? WHY OR WHY NOT?
•Murtaza Baxamusa, directs planning and development for the Family Housing Corporation, of the San Diego Building Trades in Mission Valley:
Yes. Increasing home sales and prices reflect a strong real-estate market all along the coast. It is driven by latent demand and fear of rising interest rates. But local fundamentals with regard to wage growth and new inventory are still weak. Wages grew at the slowest annual rate in San Diego among the nation’s largest counties in the third quarter of last year, half the rate of inflation. Sales largely consisted of resales of existing units, picking up from a prolonged retraction. For new inventory, it is questionable if the price or stock caters to the average San Diego household.
•Michael Lea, real estate professor at San Diego State University:
Sales were significantly up in March signaling a strengthening housing market. Rising equity and continued low mortgage rates boosted inventory and sales. I would not forecast a “peak” season however. Inventory will remain low reflecting a lock in effect for homeowners who have owned for a number of years and who do not want to pay capital gains tax or have an increase in property tax (affecting higher value, coastal properties) and lingering low or negative equity (affecting lower value, outlying areas). Affordability is an on-going problem particularly if interest rates rise later in the year.
•Chris Anderson, president of the Greater San Diego Association of Realtors:
San Diegans certainly can expect to see a strong real-estate market in 2015, and that’s good news for our region. The spring selling season is certainly off to a good start. Statistics from the Greater San Diego Association of Realtors show sales of previously owned homes in March increased more than 25 percent compared to February. March through July are typically San Diego’s strongest selling months, and we’re seeing good results so far for several reasons. Rising appreciation has moved more buyers up, into larger homes, and the threat of higher interest rates has convinced many buyers to act now.
•Bill Davidson, president of Davidson Communities:
The recent upswing in sales seen in March, which appears to be following suit in April, is indicative of supply and demand finding a sense of balance. With the slow sales in 2014, and the much quicker pace recognized over the current months, the market is seemingly trending towards stability. I am reluctant to say 2015 will be the high water mark in the historical sales numbers, but I do believe we will see higher sales numbers than we have noted over the past eight years.
•Robert Vallera, senior vice president of Voit Real Estate Services in San Diego:
Yes. One of the strong drivers propelling the market forward is San Diego County’s currently robust 3.1 percent employment growth rate. The relatively high paying professional, scientific and technical service sector outperformed the overall growth rate, adding 9,100 jobs in the past year. Employment growth is a critical factor because a high-paying job, or two mid-level jobs, is a prerequisite for most people to purchase even a mid-priced home in San Diego’s expensive market. Also, the potential for the Federal Reserve to raise interest rates from their near record lows this summer will likely cause some prospective purchasers to accelerate their purchases.
•Kurt Wannebo, real estate broker and CEO of San Diego Real Estate and Investments:
It is possible 2015 sees a peak in transactions for the real estate season, as many buyers are feeling that interest rates will rise soon, and is prompting them to take more action than they have in the past couple of years. This is not to say that we may have a peak in prices for San Diego, however. Once interest rates start to increase, we will more than likely see activity start to slow down, but prices should stabilize and hopefully continue on with modest gains for a few more years to come.