Another month, another record for San Diego County home prices.
Driven by persistent shortages of homes for sale – coupled with low mortgage rates drawing more buyers into the market – the median price of homes in the region hit a record $ 750,000 in June, according to data released Tuesday by CoreLogic / DQNews.
This is up from the previous record of $ 725,000, set in May. A year ago, the median price – the point where half of all homes sold more and half sold less – was $ 600,500.
“As soon as something hits the market, within 48 hours, you start getting bids, usually multiple bids that are overbid,” said Cindy Waasdorp, real estate agent at Berkshire Hathaway who sells in the North County for over a year. more than three decades. “I don’t see him slowing down until we get the inventory. There is so much demand. “
San Diego is not alone. Home prices continue to rise across the country and particularly in Southern California.
But unlike the housing bubble of the late 2000s, where easy-money lending practices drove home prices up, this surge appears to be centered on extremely low inventories of homes and condos in the market.
At the end of June 2019, before the pandemic, approximately 10,300 homes and 3,085 condos / townhouses were actively listed in San Diego County, according to data from the Multiple Listing Service.
At the end of June of this year, only 1,947 homes and 1,004 condos / townhouses were on the market.
“We don’t need to find that many buyers to sell these homes because we don’t have a lot of homes to sell,” said Nathan Moeder, director of San Diego real estate consultant, London Moeder Advisors. “So, unfortunately, they go to those who have the means.”
Competition is particularly intense for the San Diego version of single-family startup homes. Prices have increased over the past year from $ 500,000 to $ 550,000 to $ 700,000 or more, said Samantha O’Brien, real estate agent at PorchLight at University Heights.
“I sent an offer last week for some clients. We have exceeded the requested $ 10,000. It was not accepted because another offer was made that exceeded $ 45,000, ”she said. “So $ 10,000 or $ 15,000 more than asking price won’t get you the house on a hot property that just went onto the market.”
Moeder, the real estate consultant, said the San Diego area has been below state-mandated housing construction targets for several years.
Within the city limits of San Diego, the regional housing needs assessment called for the construction of 88,100 additional housing units from 2010 to 2020. Just over 37,000 were built through the end of 2018, or 42% of the target. Updated data was not available.
“We’re just not building enough,” Moeder said. “The number one concern in the region for employers is to find accommodation for their employees. Sadly I think we have become the model for Santa Barbara i.e. we only have limited stock and cannot meet demand so we are an expensive place to live .
For now, however, the price depends on the context where the buyers are coming from. Compared to Orange County and Los Angeles, San Diego is “relatively cheaper,” said Selma Hepp, deputy chief economist at CoreLogic.
“The region remains very attractive to young buyers both because of the relative affordability but also because of the strong growth in higher paying jobs and those in medical research,” said Hepp.
Median prices in Orange County hit $ 900,000 last month, while Los Angeles hit $ 790,000, according to DQNews.
“We have a lot of buyers coming from San Francisco, Los Angeles and Orange County because they can now work remotely,” Waasdorp said. “Instead of paying high prices for something much smaller, like a condo or apartment, they can move to San Diego and our prices seem cheap to them. They can have half an acre. So life has changed since COVID. “
According to CoreLogic / DQ News, 4,789 homes and condos sold in June. This represents an increase from 3,561 sales in June 2020 in the midst of the pandemic.
It could take some time for the pace of price increases to moderate, real estate experts say. The number of homes for sale is unlikely to match demand anytime soon. While rising mortgage rates may chill the market, there are few signs of significant rate hikes on the horizon.
“As in most California metropolitan areas, prices in San Diego continue to be under high pressure due to a historically low inventory of homes for sale and very little new construction,” said Hepp, deputy economist at CoreLogic. “As a result, the CoreLogic HPI forecast places San Diego among the fastest growing areas for home prices over the next year with an expected 11% price increase through May 2022.”