If you want to keep your pulse on the US real estate markets there are few better places than Southern California. The local market here in San Diego has been red hot in 2013, but is really starting to slow down. In fact, September was one of the weakest years in the last 5 years. This is partly seasonal, but also a much slower trend than in recent years. Price appreciation is flat month over month, inventory is up and demand is down. Buyers are becoming much more tepid as some of the unsustainable price trends in recent years are making the market unaffordable. Here’s more via Fidelity Pacific Real Estate:
“In September the San Diego housing market saw inventory increase, pending sales decrease, months’ supply increase and sold homes decrease. The market has had major changes since the spring market with more sellers coming on the market and fewer buyers in the market. While year over year prices continue to have substantial increases month to month price change have gone flat. The market continues to be a sellers’ market the heat from multiple offers has significantly reduced.
Home sales generally decline in the fall and winter but the sales this September dropped to the lowest September sales in 4 of the past 5 years. Since 2013 has been the best sales year in the last 5 years the drop this September was more than the normal seasonal decline. I believe that much of the decline is due to the bubble prices of this year. In 2009 homes less than 1,000 sq. ft. were selling for $180,000 compared to $276,000 this September. Homes that were between 1000 to 1300 sq. ft. sold in 2009 for $269,000 and now are selling for $372,000. These levels of price changes are pushing buyers out of the market and now we see interest rates increasing, adding to the cost of buying, only adding to the affordability problem in the market resulting in lower demand. I see this trend continuing through the winter months into the beginning of next year.”