NEW: Neighborhood Corner — what’s happening with University City Real Estate

Today begins a new section of the blog called Neighborhood Corner. Put simply, it’s a quick snapshot of what is happening with single family homes in a neighborhood today compared to one year ago.

The first corner I will profile is University City, a neighborhood of San Diego. The ZIP code is 92122.

FACTS:

Presently for sale: 23 homes, average asking price $684,817

In escrow at this time: 21 homes, average asking price $630,686

Sold since January 1, 2012: 45 homes, average sales price $633,896

In 2011:

Sold 1/1/2011 – 12/31/2011: 105 homes, average sold price $591,737

ANALYSIS:

University City is on par to sell about 108 – 115 homes this year, a small increase over last year.

University City pricing has inched up significant from 2011 to 2012, due mainly to some “junk” bank-owned inventory that was listed and sold in 2011. My estimate is that by year end, the average sold price in UC will be about where it is today: $633,896 ~ up to about $650,000.

Despite this good news that bank owned junk is almost completely out of UC and prices are a slight bit higher, there is downward pressure on pricing for homes not yet sold. The average asking price is still a solid 8% over the average sold price, and perception among buyers is that it’s still a buyer’s market in this price range. Which I believe is true. Expect “low ball” offers on some of these currently listed homes and the wrestling match with a buyer over what the house is worth to them and what it’s worth to a seller.

Interest rates are low, but the lowest rates go to only the highest qualified people with the most money down. That said, even 3.5% down FHA loans are extremely reasonable, so buyers who have just now come to the party are a bit late. Houses are in a fierce bidding war up to $400,000.  Higher-priced UC sellers may feel a bit pinched and wondering why they’re not getting full price offers. That’s because the party hasn’t come to them and won’t for at least another year. There is no bidding war for the higher prices for UC homes.

Having just sold a beautiful home in UC, I can tell you that we got multiple low ball offers from very qualified buyers, and in response to that, lowered our price to $645,000 but then held firm.  We were on the market a total of 27 days and closed less than a month after accepting a deal at $645,000.

The danger sellers in UC face by not lowering their prices now is potentially chasing a market down ever so slightly over the summer, and doing so with plenty of competition. I do not predict a big increase in the average sold price for UC by year-end. There is no bidding war coming in 2012 for the high-end UC seller.

These are all the University City homes for sale today.  A few are south of the I-52 and part of La Jolla Colony and will have some HOA dues. Most are the traditional single family homes you think of when you think UC.

If you wish to learn more about any of these, please ask.

 

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