Median home prices in San Diego County rose to $740,000 in September as the number of homes for sale decreased and competition for real estate increased.
CoreLogic/DQNews, which released its report on Wednesday, said prices are up 13.8 percent in a year. September’s numbers posted a change of pace after two months of declines, but the average price is still far from its peak of $749,750 reached in June.
Housing industry analysts attribute much of the decline in recent months to a steady rise in the number of homes for sale, reduced competition and bid wars. However, the stock fell again in September and the price started to rise.
The fundamental imbalance between supply and demand is driving prices higher, said Alan Jane, an economist at the University of San Diego, and he didn’t see much change for the rest of the year.
“Buyers are just fighting for fewer properties available,” he said.
Jane said home inventory appears to be a bigger factor in price increases, for now, than a marginal increase in mortgage rates. He said that if mortgage rates go up too much, that would be a factor, but rates haven’t gone up enough to deter buyers.
The number of homes for sale in San Diego County remains at record lows. He said there were 4,016 homes for sale from August 30 to September 26 Redfin Data Center. This compares with about 5,512 active listings around the same time in 2020; 8140 in 2019; and 9356 in 2018.
The lowest point for home sales in February was at 3,471, but it rose to around 4,700 in July. From there there was a sharp decline.
Mortgage rates are still low, but not as low as they were at the end of 2020. The 30-year fixed-rate mortgage rate was 2.90 percent in September, she said. Freddy Maccompared to 2.89 percent in the previous year. The rate is above the December average of 2.68 percent, the lowest on records dating back to 1971.
Raylene Brundage, an agent who sells in many Northern County communities, said the struggle for sellers now is to find a new home to live in if they decide to sell. It would be hard to find a new spot in San Diego, but he said half of his customers are selling out and out of the state.
But across the United States, there are also fewer homes for sale, as well as higher prices. So it’s also hard to find a place to live outside of California, compared to the past few years. Home prices nationwide rose 19.7 percent in July, according to S&P CoreLogic Case-Shiller Indicators.
“We find that they have nowhere to go,” Brundage said.
All housing types in San Diego have seen increases this year, but apartment prices have seen the biggest increase in recent months. The median September price for a resale condo was $565,000, matching the all-time high price recorded in the previous month.
The median price for a single-family home resale was $831,250, down from a high of $840,000 in July. The median for newly built homes, which includes new homes, condos, and townhomes, was $715,000. That’s down from the October 2018 record of $812,500, which reflects an increase in luxury single-family homes for sale.
Redfin data center said about 60 percent of homes for sale in San Diego County in September sold within two weeks. That’s percent down from 73 percent in March.
Even with prices rising and stock dropping dramatically, shoppers are more selective than they were earlier this year, when it looked like anything was going to sell, said Jean Ryan, RE/MAX agent in Ramona.
He said listings with photos are grainy only and no production takes longer to sell. Some sellers are also setting unrealistically high prices for homes, Ryan said, hoping to benefit from market demand.
“You can’t take pictures with your cell phone, not make the bed, and then put an exorbitant price on it and expect to sell it,” he said.
For example, Ryan said he put two single-family homes on the market Thursday — both for $679,000 — and had received several offers by Sunday. Both are in the contract above selling prices. Both homes were created for professional photo shoots.
Price increases in Southern California have subsided compared to other points in the pandemic. San Diego County reported the highest monthly gain of 2.1 percent. It was followed by Los Angeles County, which rose 1.3 percent with an average of $795,000, and Riverside County, which rose 0.4 percent, with an average of $527,000.
Price in Ventura County dropped 2.1 percent to an average of $725,000. In Orange County, it fell 1.1 percent to an average of $890,000; San Bernardino County fell 0.4 percent to an average of $463,000.
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