Home prices in San Diego County have now been down for five consecutive months.
The median home price was $775,000 in October, CoreLogic said Tuesday. It hit an all-time high of $850,000 in May, but the market slowed markedly as interest rates rose.
From September to October, the San Diego County median price fell 2.2%, making it one of the largest monthly drops in Southern California. The median, the point at which half of all homes sold above and half below, combines all sales of single-family homes, condos, and townhouses.
Home prices have been falling across the country, but pricier markets, like San Diego, are falling faster. Although prices have come down, higher interest rates mean higher monthly payments.
Jan Ryan, a RE/MAX agent at Ramona, said she typically has four to six homes in stock at any given time. She now she has none. Ryan said he sees many potential buyers struggling financially with the higher interest rates, and many sellers are having a hard time accepting that the selling prices are now lower.
“The craziest thing is that inventory is still low,” he said. “Sellers keep the price up, instead of lowering it, hoping that things will change in the future. Some are taking (homes) off the market and waiting for spring.”
The interest rate on a 30-year fixed-rate mortgage was 6.9% in October, according to Freddy Mac, compared to 3.07 percent a year earlier. Assuming a 20% down payment, the monthly payments for a $775,000 home in San Diego County would have been about $2,920 this time last year, up from $4,366 today.
San Diego has had one of the fastest-appreciating home prices in the nation for much of the pandemic. Prices continue to rise by 5.4% in one year. However, that is a far cry from May when it increased by 17.2%.
The average days on the market for a home sale in San Diego County was 28 days in October, said the Redfin Data Center. This is an increase from nine days earlier in the year. Redfin said about 46% of listed homes saw their prices fall, up from 12% in January.
Home inventory is down as more homes are pulled off the market. There were 5,007 homes listed from Oct. 3 to Oct. 30, Redfin said. There were nearly 6,000 listings at the end of July.
Lawrence Yun, chief economist at the National Association of Realtors, recently expected. that home prices will continue to rise modestly in 2023, by 1%, because inventory is so low. It also expects prices to rise by 5% in 2024.
Yun said the nation won’t see a Great Recession-style price crash because fewer homes are available today than then. For example, in San Diego County, 17,306 homes were built in 2004, up from 8,053 this year. Meanwhile, the population increased by about 356,000 people during that time.
Here’s how San Diego County’s price by home type changed in October:
- Single Family Home Resales: Median of $842,000 with 1,392 sales. That’s less than a high of $950,000 in April.
- Condo Resale: Median of $628,500, with 727 sales. It’s down from a record high of $663,000 in May.
- New Construction: Median of $840,000, with 203 sales. This figure combines single family homes, townhouses and condominiums. It’s down from its high of $890,500 in August.
Almost all of Southern California saw the price drop from September to October. Riverside County saw the largest decline, down 2.7% to a median of $545,000.
It was followed by San Diego County with its 2.2% decline; Ventura County, 1.3% for a median of $755,000; San Bernardino County, down 1% to $490,000 and Orange County, down 0.1% to a median of $950,000. Los Angeles County increased 0.2% to a median of $801,500.
