So What is Going On?-Redux
by Jim Scott

After two years of declining inventories, the number of homes for sale in Mission Hills has doubled in the past six weeks. Last month I speculated that perhaps the sudden increase in prices this Spring was temporary. That observation, at least through this writing, is both right and wrong.

In spite of the increase in homes for sale, recent pending sales show no sign of prices abating to the levels of early 1998. New listings, if fact, have asking prices that are generally at or above $250 per square foot. 

The reason for this is possibly explained by the chart below. Even though inventories have doubled, they are still low compared to four or five years ago. 

As long as the local economy prospers and inventory does not continue to increase dramatically, prices should stabilize for the rest of 1998. But there are other price risks present. Interest rates may rise and there could be a minor correction in the stock market. Either event would significantly impact on real estate prices. Buyers are more willing to bid up prices, often to unrealistic levels, when they are making money in the stock market and interest rates are low. And there is always the potential for more homes to appear on the market because of the recent price increases. 

The lower rate of sales this Spring, however, is indicative of the unusual nature of the market. This is perhaps the most volatile and unpredictable marketplace I have seen in my 16 years of selling real estate in this area. 

The chart above shows the recent increase in homes for sale, which may affect future pricing. During the past recession, ofter the inventory would approach 60 homes, about four times the amount of homes for sale two months ago. 

Last month I received so many requests for my 35-page paper on investing in apartments in San Diego County that I am repeating my earlier offer for a complimentary copy. Please call and I will send you one. It is still a great time to buy apartments! 

You can reach Jim Scott by email or at his office at 1111 Fort Stockton Drive. Jim's direct line is 885-9511. 

Jim has been a homeowner in Mission Hills since 1976. Scott & Quinn is the oldest full service real estate company in Mission Hills. There is also a professional property management team on staff.