County median home price hits $740,000 as buyers are ‘scrambling over fewer available properties’
The price had been on the decline for two months but bounced back in September as the number of homes for sale fell.
San Diego County’s median home price increased to $740,000 in September as the number of homes for sale dropped and competition for properties heated up.
Prices are up 13.8 percent in a year, according to CoreLogic/DQNews, which released its report Oct. 20. September’s numbers marked a change of pace after two months of declines, but the median price is still shy of its peak of $749,750 reached in June.
In August, the price was $725,000 and in July it was $730,500.
Housing analysts tied much of the decline the past few months to a steady increase in the number of homes for sale, which reduced competition and bidding wars. However, inventory decreased again in September and the price started to climb.
Alan Gin, an economist at the University of San Diego, said a basic supply and demand imbalance is pushing up prices, and he didn’t see much changing the rest of the year.
“Buyers are just scrambling over fewer available properties,” he said.
Gin said home inventory seemed to be playing a bigger factor in rising prices at the moment than marginally increasing mortgage rates. If mortgage rates go up significantly, it will be a factor, he said, but rates have not gone up enough to deter buyers.
The number of homes for sale in San Diego County continues to remain near historic lows. There were 4,016 homes for sale from Aug. 30 to Sept. 26, according to the Redfin Data Center, compared with 5,512 active listings around the same time in 2020; 8,140 in 2019; and 9,356 in 2018.
The low point of homes for sale was February with 3,471. In July that had increased to around 4,700, but there was a sharp drop after that.
Mortgage rates are still low but not as low as they were at the end of 2020. The interest rate for a 30-year fixed-rate mortgage was 2.90 percent in September, according to Freddie Mac, up from 2.89 percent a year before. The rate is up from December’s average of 2.68 percent, which was the lowest in records going back to 1971.
Real estate agent Raylene Brundage said the struggle for sellers is finding a new house to live in if they decide to sell. It would be difficult to find a new place in the San Diego area, but she said about half her clients have been selling and moving out of state.
The Beracha, Hardin & Johnson Buy vs. Rent Index says it make more sense to invest in stocks and bonds than a house for many San Diegans.
But across the United States, there also are fewer homes for sale, as well as rising prices. So it is tougher to find a place to live outside California, too. National home prices were up 19.7 percent in July, according to the S&P CoreLogic Case-Shiller Indices.
“We’re stuck with them not having anywhere to go,” Brundage said.
All types of housing in San Diego experienced growth this year, but condominium prices have seen the largest rise in the past few months. September’s median price for a resale condo was $565,000, which ties the all-time high reached the previous month.
The median for a resale single-family house was $831,250, down from a peak of $840,000 in July. The newly built median, which includes new houses, condos and townhouses, was $715,000.
About 60 percent of homes listed for sale in San Diego County in September were sold within two weeks, according to the Redfin Data Center. That was down from 73 percent in March.
Agent Jan Ryan said that even with rising prices and lower inventory, buyers are getting pickier than they were earlier this year when it seemed like anything would sell. She said listings with only grainy photos and no staging are taking longer to sell. Ryan said some sellers also are setting unrealistically high prices for homes, hoping to cash in on the hot market.
“You can’t take pictures with your cellphone, not make the bed and then price it high and expect it to sell,” she said.
Price gains across Southern California have cooled compared with other points during the COVID-19 pandemic. San Diego County had the biggest month-over-month gain at 2.1 percent. It was followed by Los Angeles County, which was up 1.3 percent for a median of $795,000, and Riverside County, up 0.4 percent for a median of $527,000.
Ventura County’s price was down 2.1 percent for a median of $725,000; Orange County was down 1.1 percent for a median of $890,000; and San Bernardino County was down 0.4 percent for a median of $463,000.
— Point Loma-OB Monthly staff contributed to this report. ◆