SAN DIEGO — Sales of new and used houses in San Diego are barreling along at record or near-record paces in 1987, despite an increase in mortgage interest rates over 1986 and the economic uncertainty produced by Black Monday's stock market crash.
Buyers' continued heavy demand for housing--perhaps spurred by an awareness that San Diego's growth limitation ordinance will inhibit future construction--has pushed prices of both new and used prices up to record levels in 1987.
A survey of home resales in the San Diego metropolitan area compiled by the San Diego Board of Realtors shows that unit sales of previously owned homes totaled 14,751 through November of 1987--already exceeding the 14,655 sales set for all 12 months in 1986.
This year's 12-month total promises to be the highest since the San Diego, East County and South Bay boards of realtors "regionalized" their reporting of sales in 1983, San Diego Board spokeswoman Karen Rountree said.
The average sale price of previously owned houses sold in the San Diego metropolitan area through November was $146,171, an 8% increase over the average price over the same period last year. This year's average sale price is also the highest since regional totals have been kept.
As far as new housing units are concerned, 11,931 new attached and detached units were sold through the first nine months of 1987, off 5% from the 12,558 units sold countywide over the first three quarters of 1986, which was a record year, according to Market Profiles, a San Diego market research firm that tracks subdivision sales.
Average prices of new units sold have increased substantially this year, Market Profiles said. Through September, the weighted average sale price of single-family houses in the county was $167,991, up 31% from the $128,341 average cost over the same period last year.
Higher Costs Reflected
Market Profiles President Russ Valone cautioned that the bump in new housing costs reflects not only higher construction and land costs but also a shift in the 1987 market to more "move-up" buyers looking for bigger and more expensive housing.
Average sale prices of new attached housing units, such as condominiums, townhouses and duplexes, are also up substantially on a year-to-date basis to $128,341. That's 14% above the $111,999 average price over the same nine months last year, Market Profiles said.
Sales prices of new and used housing have continued to increase despite the increase in fixed-rate mortgage rates from a low of 8.75% to 9% in March of this year to the current 10.5% to 10.75% now available on 30-year loans.
Fixed-rate mortgages were a quarter-point to half-point higher in October before the Federal Reserve Bank stepped in to lower rates in the wake of the October stock market crash, said Dennis Casey, Home Federal Savings and Loan's group vice president for retail loan services.
Loan Activity Down
Casey said his S&L has seen new loan activity "taper off moderately" since interest rates ratcheted up from their low in March but said that the loan volume decrease may be more indicative of fewer loan refinancings by existing homeowners than less home-buying activity.
Still, Ray Baker of Century 21 Golden Circle Realty in Mira Mesa said he has seen first-time buyers, who make up the lion's share of his clients, cool off in recent weeks since the stock market crash.
"People are unsure about the economy," Baker said. "If you go back to 1981 and 1982, when we had rates going off the wall, the threat of gas lines again, the public crossed its arms and withdrew from the marketplace," Baker said, adding that he senses that "discretionary buyers" have similarly withdrawn from home buying.
Ann Throckmorton, a broker-owner at Century 21 Regents Properties, whose clients typically are shopping for "move-up" housing in the $200,000 range, painted a different picture. She said her brokerage is experienced "strong demand" for housing that is currently frustrated by a lack of available properties.
"We have many very qualified buyers waiting for inventory," Throckmorton said. "Whether its in Mira Mesa or La Jolla, as long as a house is priced at fair market value, we can sell it," she said.