San Diego Housing Market Continues To Struggle

More than 3,200 homes were sold in San Diego County in August, according to the San Diego-based real estate tracking firm Dataquick.

That's up 7 percent from a year ago. Home sales jumped a bit, but home prices fell about 5 percent. Most of the activity involved the region's least expensive homes.

"When you compare with a year ago, the homes selling for less than $300,000 actually saw a 10 percent increase. Whereas some of the higher price ranges you saw a decline," said Andrew LaPage of Dataquick.

Home sales were up, but they remain well below the monthly average for this time of year. August is typically the busiest month of the year for home sales.

Last month's home sales were half what they were in August 2003, when the market was in balance. Even so, last month's sales numbers were higher than July and last August.

Distressed sales also play a role in the local housing market.

"We see an increase in the notice of default filings the first step in the foreclosure process during August," said LaPage. "It was a rather sharp increase. It's just unclear whether that was a blip or the beginning of a new trend."

Homes prices in Southern California have declined for the last two months and have been down year-over-year for the last six months.