Activity is soaring throughout San Diego, Riverside and Orange Counties... so why does the median price continue to fall?
Keep in mind that the median price is that "line" at which half of the homes sell above, and half sell below.
As you know, foreclosures have had a more pronounced impact on the lower end of our market. It was entry level buyers who drove the frenzy in the final stages of our housing boom, enticed by easy money and lenders who could not say no.
When things turned, it was the newest homeowers who had no equity to withstand the storm, and so for the most part it's been homeowners who benefitted from the easiest access to credit that have been hit the hardest.
And these homeowners were predominantly in the entry-level of our market.
What that means is that foreclosures have had a disproportionate impact on the lower end of our market, which means that the biggest discounts have been on the housing inventory that was already the cheapest... and that means you're seeing a lot more sales of $100,000 foreclosures in Lake Elsinore (for example) than million dollar homes in Del Mar, Coto de Caza or Yorba Linda.
So if the overall median home price in Southern California is off over 50% from its peak in 2007 - does that mean everything is half off?
No way.
It means that the market is being driven by the cheapest housing stock... and that fact continues to pull the median price down.
I'm not saying the higher end of the market has been immune - I'm not saying that at all.
But I am saying that one of the reasons our clients need us is to interpret these numbers, and to let them know that price and value changes happen neighborhood by neighborhood, not based on a headline in the Los Angeles Times or San Diego Union-Tribune.
In a market where our clients have tons of general information, it is up to us to be "the expert" on local neighborhoods.
