Has the San Diego Market Changed?

As we talk with buyers and sellers a common question keep coming up during our discussions, “Has the market in San Diego changed?”  We have seen an increase in inventory and buyers have become more patient.  A look at the current financial landscape gives some perspective as to what has been happening in the market.  
In June a widely celebrated news release reported that all 8.7 million jobs lost in the great recession have been recovered.  Of course that is great news. However the average income of those jobs is still 23% less than before the Great Recession.  Additionally with population growth we are still nearly 7 million jobs short of where we need to be.  

Middle class residents are leaving San Diego County at an increasing pace simply because they cannot afford to live here.

In a recent survey, 79% of Americans believe that we are still in a recession.

“U6” or what is called real unemployment is 12.1% nationally.  The U6 unemployment rate counts not only people without work seeking full-time employment (the more familiar U-3 rate), but also counts “marginally attached workers and those working part-time for economic reasons.” Note that some of these part-time workers counted as employed by U-3 could be working as little as an hour a week. And the “marginally attached workers” include those who have gotten discouraged and stopped looking, but still want to work. The age considered for this calculation is 16 years and over. 

The labor participation rate is  the lowest it has been since the Carter Administration.

There are fewer San Diegans working and this number has been dropping significantly since March 2010.  Here is a link to this
report (be sure to scroll down to the total employed numbers at the bottom of page one:

Income in San Diego County is down almost 7% in the last three years.
Here is the link to the report:

Single Family Detached Home Sales are down over 28% from this time last year.

Here is the link to the report:

Inventory in North San Diego County is up over 34% from this time last year.

Here is the link to the report:

The Consumer Finance Protection Bureau have changed their guidelines.  The new maximum debt to income ratio that can be approved on an FHA or VA loan is 43%, down from 55% for most borrowers. This means that a borrowers earning $120,000 per year qualifies for $110,000 less with the new guidelines. 

All of this information has different implications for our housing market.  For sellers – this information will help you understand the buyers’ motivations as they put offers on your home.  Buyers need to understand this information so that shifts in sellers’ attitudes help them to negotiate the best possible deal and to be prepared as opportunities come their way.  
Be sure to ask us how this information effects your real estate goals.  Each circumstance in unique and it is our job to help you get the most value from your real estate transaction!  
Warm Regards,

Steven Cooper
Andrew Arroyo Real Estate

(619) 807-7293


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