The latest housing data from June is out and it's not looking very rosy. The First Time Homebuyer Tax Credit was a significant factor in the boost in consumer activity in the first quarter, but it seems that these sales created an atypical spring and summer market.

A similar parallel to what occurred in the first quarter of the housing market is the "Cash for Clunkers" program. Both the First Time Homebuyer Tax Credit and the "Cash for Clunkers" program created a type of false market, where a lot of inventory was sold in a short period of time rather than over the course of a "normal" market period. This real estate market has been anything but typical, so this is just one observation for decline in sales.

Consumer confidence is also lacking and can be attributed to the decline in new home sales. Although interest rates remain at historic lows, consumers are being extremely cautious towards spending as they try to secure current and prospective job opportunities. On the other hand, consumers who are in more secure financial situations are realizing that it could take a while for the real estate market to turn around and they are taking this time to refinance their homes.

We are also hearing that more foreclosures are in the pipeline and are expected to surface this coming fall. As you can see, there are many moving parts to this real estate market along with different levels of impact. The upcoming November elections could also impact consumer confidence as we see changes in leadership and pending legislation takes effect. It remains to be seen what we can expect next, but we will keep you posted from the real estate trenches. Please stay tuned to Lake Hodges to Lake Poway Real Estate for more details to come.

In case you missed it, below is Monday's article from the Union Tribune. For more information on buying or selling a home contact us today!

Local new homes sales fall, prices rise

By Jennifer Davies UNION-TRIBUNE

Monday, August 23, 2010 at 2:08 p.m.

New-home activity in San Diego County remains sluggish.

New home sales in San Diego County fell 26 percent in June from a year ago while the median price increased 4.5 percent to $499,000, says a new report from the California Building Industry Association.

On a statewide level, the monthly survey conducted by the CBIA along with Hanley Wood Market Intelligence found that new home closings were off some 36 percent from a year ago while the median price rose around 3 percent to $375,000. On a monthly basis, new home sales in the San Diego region only dipped by 1.8 percent while the median price increased 7.5 percent. Statewide sales increased 2.7 percent from May and the median price was up 4 percent.

In June 215 new home sales closed in the San Diego region, with 152 of those being of single-family variety and 58 being condos. Two townhomes and three duplexes also sold in June.

The sluggish pace of new home sales was hardly unexpected, said Liz Snow, CEO of CBIA.

"Until consumers become more confident in their job security and job prospects, we don't anticipate they'll be rushing out to buy a new home," she said.

Despite its declines, the San Diego region also performed better than many of its large metro counterparts. The Los Angeles area saw new home sales drop more than 57 percent in June from the previous year. In the Riverside region, new home closings were down 37 percent while the Santa Ana metro area fell almost 35 percent.