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According to the San Diego Association of Realtors, this past May existing detached home sales increased 1.3% from the previous month, but fell a dramatic 22% from this time last year. The median price of existing detached homes in San Diego remained unchanged from last year at $590,000 with on average, taking about two months to sell.

Homes are selling for 5% below what homeowners are trying to sell them for, averaging a sales price of about 95.3% of the asking price. During the peak of the real estate boom, homes were often sold for more than a seller’s asking price, but the market has transitioned back to a buyer's market.

Condo sales in the San Diego real estate market slowed 12% from April to May; an even more dramatic drop of 35% from last year’s mark. The median price of existing condominiums has fallen 1.3% from last year to $370,000. Within the last thirty-one days, the average sales price of a condo has been 96.2% of the asking price, with condos staying on the market for 68 days.

The overall numbers indicated a downward pressure on prices, with some hot markets remaining unaffected. In the San Diego market, there is currently an 8½-month supply of existing homes and a 10-month supply of condos—the estimated amount of time, given the current pace of sales that it would take to sell all the houses currently up for sale. Generally, homes increase in price faster than the inflation rate when there is less than a 6 ½-months’ worth of inventory. Conversely, prices begin to drop when there is too much inventory (about 9 to 10 months’ worth) and not enough sales. Areas such as Pacific and Mission Beach have a little over a 6-months’ worth supply of homes for sale, indicating that the market is pretty stable.

Decreasing sales and prices remind some wary San Diegans of the market in the early 90s. The booming real estate market that San Diego saw over the last few years is in the midst of correcting itself. The amount of sales is back down to normal levels, while over-inflated prices are responding to market pressures.

In the end, after all the statistics are in, it comes down to the individual buyer and seller. I have gotten clients 20 percent off the last market sale. So while knowing your market is good, knowing a great real estate agent is better.

Contact Brian Wennersten of RealEstate.com for more information.