This is the hot topic, similar to the question "When will housing prices start to increase ?" which is asked almost as often and unfortunately does not have as simple an answer.
There are ways to monitor the housing market though and give some perspective. One is inventory level, another is the price / rent ratio and the third is the foreclosure factor.
In Pacific Beach (92109) the inventory level is at 6.8 months which is pretty healthy. This number is calculated by taking the number of active listings (233) compared to the number that have sold in the last year (410) and divided by 12 which equals 34 sales a month. This number is then divided into the total number of listings (233) for a monthly inventory of 6.8 months. This is the length of time on average that it takes to sell a property in Pacific Beach.
The price to rent ratio is another way to assess the health of a market. Is it cheaper to buy a house than it is to rent it ? This is calculated by taking the list price of a home and dividing this by one year's rent on a comparable home. It is cheaper to buy when the ratio is below 15. San Diego county as a whole is above 15 but not by much.
Last is the foreclosure number. RealtyTrac.com gives the number of foreclosures by zipcode. Pacific Beach they said, had 1 foreclosure in 794 units. That is pretty low compared to 1 in 414 units in La Jolla and 1 in every 289 units in Carmel Valley.
