The U-T's weekly look back, look ahead

BY LILY LEUNG

SUNDAY, JANUARY 30, 2011 AT NOON

We ended last week with a flurry of new findings on foreclosures and home prices for San Diego Countyand the western U.S. We’re expecting a quieter week ahead.

Last week, a key question on foreclosures that will likely be raised throughout 2011: Is the worst over?

The simple (to some, obvious) answer is: No one knows for sure. In December, San Diego County saw foreclosures and mortgage defaults drop to their lowest levels in three years, according to DataQuick Information Systems.

But the drastic drop could be attributed to several variables, including a shadow inventory of distressed homes, an increase in short sales or an improving economy.

Compared to other major metro areas in the U.S., the San Diego region posted the third largest dip in foreclosures from 2009 to 2010, at 17 percent, according to RealtyTrac, a website of foreclosure listings. Washington D.C.,’s foreclosure rate fell the most at 22 percent. (Read the company's full report here.)

Local experts say it might be too early to celebrate those drops because foreclosure levels are still historically high in some of the hardest-hit markets.

Also last week, San Diego was among only four major metro areas in the U.S. that saw a year-over-year increase in home prices, rising 2.6 percent. (Get a refresher on that story here.)

Here are a couple things to expect this week:

Tuesday: The U.S. Census Bureau of the Department of Commerce will release its December numbers for private and public construction spending. Figures will include residential construction. (See the previous report here.)

Thursday: Freddie Mac officials will release its weekly survey on average mortgage rates. Last week, the 30-year fixed-rate mortgage averaged 4.8 percent, up from 4.74 percent. The 15-year fixed rate averaged 4.09 percent, up from 4.05 percent. (Read more about that here.)

Friday: The U.S. Bureau of Labor Statistic publishes its employment numbers for January. The previous report, which showed December figures, showed a 0.4 percentage point drop to 9.4 percent. (Read that summary here.)

Lily Leung: (619)293-1719; lily.leung@uniontrib.com; Twitter @LilyShumLeung

How San Diego housing fared in 2010

BY LILY LEUNG AND ROGER SHOWLEY

SATURDAY, JANUARY 29, 2011 AT 9:45 P.M.

San Diego County housing in 2010 paused on the way to recovery, as sales dipped and prices rose by almost exactly the same percentage for the second year in a row. The overall median for the year stood at $330,750, 6.7 percent higher than in 2009, as sales dropped by 6.3 percent to 36,829.

But the trend wasn’t uniform across the region or by price category.

Two out of three ZIP codes in San Diego County last year saw increases in median-home prices, up from about half last year, show numbers from DataQuick Information Systems, a San Diego-based research firm.

Homes at both ends of the price spectrum were winners and losers last year. Less-expensive inventory generally experienced the biggest jumps in median price from 2009 to 2010 but dipped in sales, while pricier homes were hot sells but fell in median price.

Homes in Logan Heights, Escondido South (92025) and Spring Valley — priced between $156,000 to $265,000 — increased the most in median price from the year-earlier period in combined sales probably because prices in those areas have bottomed out, some industry experts say.

On the flip side, total sales in those neighborhoods fell between 8 percent to 27 percent year-over-year, likely because of declining inventory, an ongoing struggle for the county.

The inverse dynamic was evident among higher-end homes. Coronado, Solana Beach andRancho Santa Fe — in the $1 million to $1.9 million range — were among the top ZIP codes with the largest increases in combined home sales.

Experts suspect they were hot zones because sellers finally gave in and cut prices.

In Rancho Santa Fe, single-family resale median prices dropped 11 percent in 2010 from 2009; Solana Beach’s single-family median price slipped 2.2 percent. Coronado actually posted an 8.4 percent gain.

Interpretations of last year’s figures vary. The region’s market is either slowly emerging from the worst downturn in the post-World War IIperiod or it is facing a mild “double dip” in prices on the horizon, experts say.

So far, 2010’s median price has bounced up from its overall low of $310,000 in 2009 but remains 33.9 percent below the all-time peak of $500,000 in both 2005 and 2006 for all homes combined.

Most forecasters expect prices to stay flat this year, as the overall economy and job market struggle to grow. Interest rates also are expected to play a part in the housing picture. If they rise unexpectedly, that could choke off buying and lead to lower prices.

Concurrently, many experts expect a new wave of distressed properties to enter the market and drive down prices. If that occurs, it could prompt a double dip on a national level.

IHS Global Insight, a Massachusetts economic analysis firm, expects a 5 percent to 8 percent decline in prices nationally this year.

The Union-Tribune’s EconoMeter panel of eight economists predicts that San Diego prices will end the year as much as 5.1 percent up or as much as 2.1 percent down from the December 2010 median.

Given this uncertainty, home builders continue to show reluctance to start many new projects, and homeowners who don’t have to sell remain on the sidelines.

“We created over 20,000 jobs and built less than 3,300 housing units,” said Sherman D. Harmer Jr., president of Urban Housing Partners. “We underbuilt the market … That will create future price pressures. It’s Economics 101.”

However, the latest household job survey still showed county employment at nearly 60,000 below the pre-recession level, meaning housing demand remains weak, at least for now.

Lily Leung: (619)293-1719; lily.leung@uniontrib.com; Twitter @LilyShumLeung

Real estate: The U-T's weekly outlook

BY LILY LEUNG

SUNDAY, JANUARY 23, 2011 AT 6 A.M.

We're heading into a full week of key reports, from year-end foreclosure numbers for San Diego County to home prices for the local region and 19 other metro areas.

Tuesday: The S&P/Case-Shiller Home Price Index, a leading indicator of residential-market health, is released. It shows changes in home prices in 20 metro regions, including San Diego County. The index comes out monthly but has a two-month lag, so upcoming numbers will cover November. (Click here for last month's story by U-T reporter Mike Freeman.)

Also on Tuesday, DataQuick Information Systems will release December and year-end foreclosure figures for San Diego County.

Wednesday: The U.S. Census Bureau publishes its residential sales data for December. Last month's report showed the rate of sales for new single-family houses in November rose 5.5 percent from October but is 21 percent lower than November 2009. (Read last month's reporthere.)

Thursday: Freddie Mac officials release their weekly survey on average mortgage rates in the U.S. The rates were mixed last week, with the average 30-year fixed rate rising to 4.74 percent from 4.71 percent the previous week and the 15-year fixed rate slipping to 4.05 percent from 4.08 percent.

Friday: The University of San Diego is the site of the yearly San Diego County Economic Roundtable, a forum of experts who will share their thoughts on 2011 trends in real estate, growth and employment. Lynn Reaser, chief economist of Point Loma Nazarene University, will be among the panelists.

The Union-Tribune is among the sponsors of the event. Registration is closed, but you can get on the waiting list by e-mailing GaryMoss@workforce.org with your name and contact information, according to the county website.

Lily Leung: (619)293-1719; lily.leung@uniontrib.com; Twitter @LilyShumLeung

SoCal home prices still outpacing San Diego's in December

BY LILY LEUNG

TUESDAY, JANUARY 18, 2011 AT 10:53 A.M.

Home prices in Southern Californiaincreased slightly while home sales rose more than normal in December from November, DataQuick Information Systems reported on Tuesday.

The median price for the region's six major counties, including San Diego, increased to $290,000, or 1percent, from November. The month-to-month median for San Diego County alone slipped to $333,000 in December, a 0.6 percent decrease, as previously reported.

However the regional year-over-year increase in median prices was lower, at 0.3 percent, which could suggest "a flat market in terms of pricing," said DataQuick analyst Andrew LePage. In San Diego, the median increased 0.9 percent year-over-year.

Overall home sales in Southern California were higher than usual, increasing 20.5 percent from November to December. San Diego County also saw an above-average gain during the same time frame, at 24 percent. The average gain has been 12.9 percent, according to DataQuick records, which date back to 1988.

The uptick in fall home sales can be explained by "ultra-low mortgage rates coupled with lower prices," said DataQuick PresidentJohn Walsh.

Still, home sales decreased on a year-to-year basis across the region, from 5 percent to 15 percent. During the same period, the overall decrease in Southern California is 12.5 percent.

December's regional total home sales were the lowest for that month since December 2007, DataQuick reported. Sales of new homes in December were the lowest for that month since DataQuick began keeping records in 1988.

“Looking back at 2010, it’s hard to ignore the ongoing slump in the Southland’s new-home market,” Walsh said.

Walsh added: "What happens next will hinge largely on the pace of the economic recovery and the manner in which lenders manage their inventories of distressed properties, which are competition for new homes.”

Lily Leung: (619)293-1719; lily.leung@uniontrib.com; Twitter @LilyShumLeung

Good News For San Diego!

The San Diego area regained its lead position for the strongest home price appreciation over the next 12 months in the most recent update to the U.S. real estate market forecast from Veros Real Estate Solutions, an industry leader in enterprise risk management and collateral valuation services. Veros' U.S. real estate market forecast, VeroFORECAST, uses advanced analytics and micro-market data to achieve highly accurate results, and is utilized by economists, statisticians and business leaders as a key resource for forecasting and strategic planning due to its consistent strength and accuracy over the eight years the forecast has been available.

The forecast for December 2010 through December 2011 indicates that select markets in the U.S. can expect to witness 2.5-3.5% appreciation on home values over the next 12 months, including Washington State's tri-city area, Pittsburgh, Pennsylvania, Fargo, North Dakota, and the Washington D.C. metro area. Florida, Reno, Nevada and Boise, Idaho will experience the nation's greatest depreciation rates in the coming 12 months, a trend which continues from prior periods.

Projected Five Strongest Markets*

1. San Diego / Carlsbad / San Marcos, CA +3.5%

2. Kennewick / Richland / Pasco, WA +3.4%

3. Pittsburgh, PA +2.7%

4. Fargo, ND-MN +2.6%

5. Washington / Arlington / Alexandria, DC-VA-MD-WV +2.5%

Projected Five Weakest Markets*

1. Reno / Sparks, NV -7.2%

2. Orlando / Kissimmee, FL -6.5%

3. Boise City / Nampa, ID -6.4%

4. Deltona / Daytona Beach / Ormond Beach, FL -6.3%

5. Port St. Lucie / Fort Pierce, FL -6.3%