San Diego buyers ‘scrambling over fewer available properties’ as price hits $740K

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, said CoreLogic/DQNews, which released its report on Wednesday. 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.

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 once again decreased 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 for 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. He said if mortgage rates go up significantly, it will be a factor, but rates have not gone up enough to deter buyers.

The number of homes for sale in San Diego County continues to remain at historic lows. There were 4,016 homes for sale from Aug. 30 to Sept. 26, said the Redfin Data Center. That compares to around 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, but that had increased to around 4,700 in July. 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, reports Freddie Mac, up from 2.89 percent the year before. The rate is up from December’s average of 2.68 percent, which was the lowest in records going back to 1971.

Raylene Brundage, an agent who sells in several North County communities, said the struggle for sellers right now is finding a new house to live in if they decide to sell. It would be difficult to find a new place in San Diego but she said about half her clients have been selling and moving out of state.

Business

For subscribers

Is buying a home in San Diego a good investment? Maybe not, new study says

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.

Sept. 9, 2021

But across the United States, there are also fewer homes for sale as well as rising prices. So it is tougher to find a place to live outside of California, too, compared to a few years ago. National home prices were up 19.7 percent in July, said 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 condo prices have seen the largest rise in the last 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. That is short of the record of $812,500 in October 2018, which reflected an increase in luxury single-family homes for sale.

About 60 percent of homes listed for sale in San Diego County in September were sold within two weeks, said the Redfin Data Center. That is down from 73 percent in March.

Jan Ryan, an RE/MAX agent based in Ramona, said even with rising prices and drastically 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 are also setting unrealistically high prices for homes, hoping to cash in on the hot market.

Business

For subscribers

California just changed single-family zoning laws. Is it the death of San Diego suburbs?

Senate Bill 9, signed by Gov. Newsom, allows a lot with one single-family lot to be turned into up to four units.

Sept. 25, 2021

“You can’t take pictures with your cell phone, not make the bed, and then price it high and expect it to sell,” she said.

For instance, Ryan said she put two single-family homes on the market Thursday — both for $679,000 — and had multiple offers by Sunday. Both are in contract for over the asking prices. Both homes were staged with professional photos taken.

Price gains across Southern California have cooled compared to other points in the 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.