Deb Espinoza's Real Estate BLOG: San Diego Housing News Proof of the "Double Dip"

Home sales are down year over year in San Diego County from May 2010, down 20.4 percent , while home prices declined by 4.6 percent, according to a real estate information service.

A total of 3,087 homes sold locally last month, compared to 3,879 in May last year, based on statistics from La Jolla-based MDA DataQuick. A slowing of sales by 800 per month will continue to increase inventory and drive prices down. All but the best homes priced properly will lanquish on the market waiting for a smaller and smaller pool of buyers. This pool of buyers could be made even smaller if the government and banks continue to tighten lending standards by requiring higher down payments and hanging onto their funds with the 'death grip' that most lenders seem to have these days.

The median price of a home in the county in May was $324,500, down from $340,000 in May 2010. I am already seeing evidence in the local San Diego market that prices are continuing to drop. I see investor 'flips' with already slim margins going for lower and lower prices. Bank owned REO's that need work and short sales sit longer and most REO's are getting a 'flurry' of offers when they first come on the MLS only to fall out of pending a few weeks later when 'sight unseen' investors realize that the price they bid just isn't going to work. So, hold on because I think we are in for another wild ride in the San Diego housing market.