San Diego County’s median home price reaches $750,000 in June, another record high
The supply of homes for sale remains well below historical levels, driving buyers to offer thousands over the asking price — in one case $45,000 — in hopes of landing a hot property.
Another month, another record for San Diego County home prices.
Driven by persistent shortages of homes for sale — coupled with low mortgage rates luring more buyers into the market — the median home price in the region rose to a record $750,000 in June, according to data from CoreLogic/DQNews.
That’s up from the previous record of $725,000 set in May. A year earlier, the median price — the point where half of all homes sold for more and half sold for less — was $600,500.
“As soon as anything comes on the market, right way, within 48 hours, you start getting offers, usually multiple offers that go into overbid,” said Cindy Waasdorp, a real estate agent with Berkshire Hathaway. “I don’t see it slowing down until we get inventory. There is just such high demand.”
San Diego County isn’t alone. Home prices continue to rise nationwide and especially in Southern California.
But unlike the housing bubble in the late 2000s, where easy-money lending practices drove up housing prices, this spike appears to be centered on very low inventories of homes and condominiums on the market.
At the end of June 2019, before the COVID-19 pandemic, about 10,300 homes and 3,085 condos/townhomes were actively listed for sale in San Diego County, according to data from Multiple Listing Service.
At the end of June this year, just 1,947 homes and 1,004 condos/townhomes were on the market.
“We don’t need to find that many buyers to make these homes sell because we don’t have a lot of homes to sell,” said Nathan Moeder, a principal with San Diego real estate consultant London Moeder Advisors. “So, unfortunately, they are going to those who have means.”
Competition is particularly intense for San Diego’s version of single-family starter homes. Prices have increased in the past year from the $500,000-$550,000 range to $700,000 or more, said Samantha O’Brien, a real estate agent with PorchLight.
“I sent over an offer last week for some clients. We went $10,000 over asking. It didn’t get accepted because another offer came in that was $45,000 over asking,” O’Brien said. “So $10,000 or $15,000 over the asking price isn’t going to get you the house on a hot property that’s just come on the market.”
Moeder said the San Diego region has fallen short of state-mandated housing construction goals for several years.
Within San Diego city limits, the Regional Housing Needs Assessment called for 88,100 additional housing units to be built from 2010 to 2020. Just over 37,000 had been built through the end of 2018 — 42 percent of the goal. Updated data was not available.
“We’re just not building enough,” Moeder said. “The No. 1 concern in the region for employers is finding housing for their employees. Unfortunately, I think we’ve turned into the Santa Barbara model, which is we only have so much inventory and we can’t keep up with demand, so we’re an expensive place to live.”
For now, however, San Diego is “relatively less pricey” compared with Orange and Los Angeles counties, said Selma Hepp, deputy chief economist with CoreLogic.
“The region remains very attractive to young buyers, both due to relative affordability but also strong growth of higher-paying jobs and those in medical research,” Hepp said.
The median price in Orange County reached $900,000 last month, while Los Angeles County came in at $790,000, according to DQNews.
“We have a lot of buyers coming from San Francisco, Los Angeles and Orange County because they can work remotely now,” Waasdorp said. “Instead of paying high prices for something a lot smaller, like a condo or apartment, they can move to San Diego and our prices seem cheap to them. They can have a half-acre. So, life has changed since COVID.”
According to CoreLogic/DQ News, 4,789 local homes and condos sold in June. That is up from 3,561 sales in June 2020 amid the pandemic.
It could take some time before the pace of price increases moderates, according to real estate experts. The number of homes for sale isn’t expected to match demand anytime soon. While rising mortgage rates could cool the market, there are few signs of significant rate hikes on the horizon.
“As with most of the California metro regions, San Diego prices continue to face elevated pressure due to historically low inventory of homes for sale and very little new construction,” Hepp said. “As a result, the CoreLogic HPI forecast puts San Diego among the fastest home price growth areas over the next year, with a projected increase in prices of 11 percent through May 2022.”