Housing Inventories Continue to Increase Across The Nation While Prices are Reduced In Some Markets

The trend in the numbers of homes for sale isThis was the third straight month of year over month
continuing to increase across the country. Housingprice declines. According to DataQuick, August of
inventories are clearly rising. The more houses for sale,2006 was the slowest month for home sales in San
the more downward pressure there will be on homeDiego since August of 1997. In August of 2005 the
sales.median price of homes in San Diego was $493,000. In
A study by ZipRealty has found that housing inventoryAugust of 2006 the median price of homes in San
has increased in 18 major markets across the US. ThisDiego dropped to $482000.
data is based on condos and single family homes.The home prices in San Diego county peaked in
Look for the markets with the largest increase inNovember of 2005 at $518000. With more homes
inventory and you will find the markets that will havecoming onto the market the downward trend in prices
the least support for current prices. The place thatis expected to continue. According to DataQuick the
experienced the largest increase in inventory in Augustprices will not head into a freefall. It appears for the
was Orlando. In Orlando housing inventory for salenear future that prices will slowly continue to deflate.
increased by 8%. Also in Florida Miami alsoThis projection is based on the strong economy of
experienced a large increase in homes fore sale. InSan Diego County. In this strong economy housing
Miami the increase was 5.6%. Florida as a whole hasprices will slowly deflate and then flatten. As long as
experienced a large jump in homes for sale.the economy remains strong (there are no signs of
On the west coast the city that has the highestweakening now) home prices will not go into a freefall.
increase in in homes for sale is Seattle which hasThe condo market in San Diego may not fare as well
experienced an increase of 6.1%. Next is Sanas the single family home market. In the condo market
Francisco with a housing inventory increase of 5.6%.there has been a large amount of speculation. The
Another indicator to watch is the percentage ofmost dramatic price drop is in downtown condo
homes whose prices have been reduced in a fixedhousing. In August of 2005 the median price of a
time period. In the last ten days 44% of the homes forcondo in downtown San Diego was $654000. In
sale in Boston have had their prices reduced.August of 2006 the median price of a condo had
Sacramento is close behind Boston with 43.6% of itsdropped to $495000. This trend may be emerging in
homes for sale having their prices reduced in the lastother areas of the country that have had over building
ten days.or over conversion in the condo market. Areas in
Of the 18 metropolitan areas included in the study (allFlorida and Las Vegas have experienced an
of which had homes reduce their prices in the last tenoversupply of condos.
days on the market), Dallas was at the low end withOne trend that is emerging in San Diego is the
27.4% of homes on the market reducing their prices. Inunwillingness of many sellers to accept the lower
San Diego 28.8% of homes on the market haveprices offered for their homes. Expectations are still
dropped their prices in the last ten days.not in line with the market. While homeowners are
In southern California San Diego is the leading countyholding out for higher prices, the market continues to
to watch for trends in home prices. In the month ofdecline and home values fall even further.
August prices were down 2.2% from August of 2005.