The median home price in San Diego fell for the second month in a row in August to $ 725,000 due to slowing competition, but experts said they didn’t expect a crash or significant slowdown anytime soon. .
Prices are still up 13.3% year-on-year in San Diego County, CoreLogic / DQNews said, but down from the peak of $ 749,750 in June. San Diego was not alone, with price gains slowing in Southern California.
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One big factor seemed to be more homes on the market and fewer competing offers at the end of the summer. However, housing analysts mostly ignored the reduction as temporary, with the same factors in place that should continue to push prices up: lack of homes to sell, low mortgage rates and improving finances for professional workers.
There were other factors at play in August that may not reflect the market. On the one hand, it is typical to see a slowdown around August as the children return to school. The increase in condominium sales this month may also have affected the median price – the point at which half of homes sold more and half as much – as they cost less than single-family homes.
Mark Goldman, real estate analyst at C2 Financial Corp, said the double-digit annual price gains during the pandemic were not sustainable in the long term. Still, he said wages were up in San Diego County, stocks were still tight and mortgage rates remained low, making any cuts likely short-lived.
“The market had grown 25 percent. It’s just not sustainable, ”Goldman said. “But, will the prices go down? I do not think so. In the worst case, prices would be stable, but the most likely scenario is that they will continue to rise. “
Competition for homes may have been affected by a few more homes for sale in August. There were around 3,500 homes on the market at the start of 2021, resulting in stiff competition and more than asking prices. Home inventory has increased recently with 4,429 homes listed for sale from Aug. 2 to 29, data center Redfin said. That’s still down from 5,723 at the same time last year and 8,407 in 2019.
Samantha O’Brien, real estate agent at PorchLight in University Heights, said she noticed the additional homes on the market and the reduction in competition. She competed with just one other bid for an $ 890,000 townhouse in South Park in August, which she said would have had 10 to 12 bids in May and June.
“It doesn’t seem as intense as it was a few months ago when there were multiple offers and craziness,” she said.
O’Brien said that while things are slowing down a bit, registration numbers are still low and it’s not like the competition is gone completely. She said she put three homes up for sale in August all of which had multiple offers. In addition to the desire to own property in San Diego County, O’Brien said low interest rates continue to be a major motivator.
The interest rate for a 30-year fixed-rate mortgage was 2.84% in August, reports Freddie Mac, down from 2.94% the year before. The rate is up from the December average of 2.68%, which was the lowest since 1971.
Not all house types showed signs of cooling in August. The median price of a resale condo reached an all-time high of $ 565,000, up from its previous high of $ 561,000 in June.
Brett Dickinson, a real estate agent at Compass, said he is seeing more and more interest in condos as the price of single-family homes becomes out of reach for many of his clients.
“The prices for (single-family homes) were out of the ordinary, sky-high,” he said of the market in August. “And the inventory wasn’t that great.”
It wasn’t just middle-income buyers who settled for condominiums. Dickinson said he worked with a wealthy millennial in August to buy a downtown condo for $ 1.1 million after deciding against a single-family home in La Jolla that was too much for his budget. The buyer was looking for an investment, Dickinson said, and was optimistic about building several large downtown office redevelopment projects.
The median for a single-family resale home was $ 820,000, down from its high of $ 840,000 in July. Newly constructed homes, which include new single-family homes and condos, reached a median of $ 734,000. That’s below the record $ 812,500 in October 2018, which reflected an increase in the number of luxury single-family homes for sale.
Price increases were down or flat in Southern California in August, but still up 14% year-on-year in the six-county area. Los Angeles County fell the most month over month, down 1.3%, with a median of $ 785,000.
It was followed by San Diego County with a 0.7% reduction; Orange County was down 0.6 percent with a median of $ 900,000; and Riverside County was flat with a median of $ 525,000. Two counties saw prices rise – Ventura County up 1.1% to a median of $ 740,250 and San Bernardino County up 2.2% to a median of $ 465,000.
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Some examples of what’s available around the median home price in San Diego County:
- 1150 J St., Unit 102: An East Village condo for $ 726,900 with one bedroom and 1-1 / 2 bath. The 1,414 square foot condo is located in the Metrome building one block from Petco Park.
- 532 Maitland Ave: A two-story single-family home for $ 725,000 in South San Diego, near Imperial Beach. The 1,726 square foot home includes a four-car garage, five bedrooms and four bathrooms.
- 63 Montebello St: A Chula Vista single family home on the market for $ 725,000 with four bedrooms and three bathrooms. The 1,741 square foot home has solar panels on the roof and a new HVAC system.
- 645 Front St., Unit 511: A 1,295 square foot two bedroom, two bathroom condo in downtown San Diego listed for $ 745,000. It’s in the Renaissance building near Horton Plaza.