by Carrie Benuska
When the national real estate economy fell upon hard times, the San Marino market was one of the last to feel the effects of the slump. After holding out valiantly, the San Marino market began to see a dip toward the end of 2007 and came to to its low point in 2009. Not only did the median sales price dip, but the sales volume was affected, as well. San Marino real estate went into a bit of a hibernation, as residents sought to ride out the difficult financial times, not wanting to sell property at a low point.
2010 was definitely a turn in the right direction for San Marino real estate, with median sales price on the rise. It was at this point that I had the opportunity to hear from Leslie Appleton-Young, the chief economist for the California Association of Realtors. She went through real estate statistics for a number of Greater Pasadena communities and was able to show that most were starting to turn a corner. She made it clear, though, that our rise out of the real estate slump was going to be nothing but slow and unsteady, something like two steps forward and one step back.
It was at this point in her presentation that she brought up the idea of a “double dip.” Not to be confused with a double scoop of ice cream on a cone, she actually was referring to the idea that our recovery might only be temporary and that the market might make a second turn for the worse. Of course an economist can only look at data and make predictions. From her grasp of the data, though, the economist did not think we would experience explosive growth, but she also doubted that the Greater Pasadena real estate market would experience the dreaded “double dip.”
This week in the news, there were multiple articles discussing the concept of the “double dip,” as the nation’s real estate market continues to struggle. The flurry surrounds data reported by the real estate website, Zillow, showing that real estate prices are falling at the fastest rate since the worst days in 2008. According to Zillow, “average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month.” Zillow also reported that more than 28 percent of U.S. homeowners are underwater on their mortgage (owe more than it is worth) in the first quarter of 2011.
Stan Humphries, the chief economist for Zillow, points out that the high level of unemployment and the huge number of foreclosures are the main contributing factors to the continued price drop. Humphries points out that government programs in 2008 and 2010 pumped an estimated $22 billion into tax breaks to try to prop up the market. Although the tax breaks did make a difference at the time, Humphries believes that this approach “was stealing demand from the future.” Now that the tax breaks are gone, the market has returned to its downward trend.
With all of this negative national real estate news, I was drawn to look again at the statistics for our San Marino real estate market. Through the month of April, 2011, the median home price in San Marino continues to increase. Although our sales volume is down from the same period in 2010, it does not appear that San Marino is following the national trends. One of the keys to San Marino’s success is the continued insurgence of foreign money into our market. With our outstanding school system, beautiful and well-maintained homes, and historically high property values, San Marino Real Estate is a great investment opportunity for international buyers.
There is no doubt that the economy, especially in the state of California, is far from steady. In the midst of the troubling news, though, San Marino continues to shine brightly. Our community has been spotlighted in the news, because compared to other Southern California luxury markets, our home values were minimally affected by the real estate crisis and have quickly rebounded. More than ever, I realize the benefit of investing in San Marino real estate.
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