COUNTY MEDIAN HOME PRICE HITS RECORD HIGH OF $673K
Record-low interest rates, severely limited inventory driving surge across Southern California, experts say
San Diego County’s median home price reached $672,750 in February, an all-time high that exceeded the previous record by nearly $23,000.
Home prices were up across Southern California in February — typically a slow month for sales — with almost all areas reaching new peaks, according to CoreLogic data provided by DQNews. Experts continue to point to record-low mortgage rates and severely limited home supply as reasons for the surge.
Prices have increased 14.6 percent in a year in San Diego County, the largest increase since January 2014 when the region rapidly came out of the Great Recession. It still isn’t as high as the housing boom days of summer 2004 when prices were increasing around 27 percent annually.
Selma Hepp, CoreLogic deputy chief economist, said low interest rates and lack of home inventory are big factors, but there are also secondary reasons: Some millennials have saved a lot of money during the pandemic and want to buy, and San Diego is an affordable beach market compared with other places in California.
“There’s so many things happening right now,” she said.
Hepp’s forecast for this year says home prices in San Diego County could increase more than 8 percent — the fastest in the nation — in part because of the strength of the biotech industry and its potential growth after the pandemic. She also noted that San Diego is a popular place for second homes. Hepp said CoreLogic knows mortgage applications for secondary home purchases have doubled in a year — but the actual number of secondary home sales is unclear because many buyers are wealthy and don’t need a mortgage.
There were 3,263 active home listings in San Diego County from Feb. 1 to Feb. 28, said the Redfin Data Center. That is the lowest Redfin has ever reported in records going back to 2017. The number of home listings is now significantly dwarfed by the number of real estate agents in the county. There are roughly 20,000 members of the biggest local organization, the Greater San Diego Association of Realtors.
Yet not all agents are active, and some just get their license to sell one house, said Najla Wehbe Dipp, a real estate agent primarily in East County. Also, she said many agents are waiting out the
pandemic before going back to work. Dipp said she has gained clients after sellers were denied by agents who were staying home out of concern for the virus.
“It’s our business. I just can’t let it go like that,” she said, noting that she follows all COVID-19 protocols.
Dipp said she is competing with dozens of agents for each home that hits the market. She recently worked for several months with a couple in their 50s who were unsuccessful in 10 offers before getting a two-bedroom townhouse in Carmel Valley for $890,000. They went $100,000 over the asking price.
“My buyers decided to go over the appraisal (of $830,000) because they said even if they were overpaying, the market will keep going up,” Dipp said. “That’s how they felt about it.”
Mortgage rates stayed at record lows in February. The interest rate for a 30-year, fixed-rate mortgage was 2.81 percent, said Freddie Mac, down from 3.47 percent the year before. The rate is up slightly from December’s average of 2.68 percent, which was the lowest in records going back to 1971.
Gary Kent, a La Jollabased real estate agent, said the interest rates make a big difference in buyers who are thinking in terms of monthly payments.
“Things tend to be more payment-driven than pricedriven,” he said. “They say, Well, what can I afford? Oh, rates are lower, so I can afford more and offer more.’”
In February, there were 3,231 home sales, nearly the same number as listings. It isn’t an exact comparison because some sales that were completed in February began the process in January, and if homes sell very quickly, they don’t always get counted in total numbers. Redfin said the median number of days on the market for a San Diego County home was 11 days in February, compared with 27 at the same time last year.
While there is some hope that more potential sellers will put homes on the market once they are vaccinated and feel safer — increasing the number of listings — there is another issue that several agents told The San Diego Union-Tribune they are facing. They said potential sellers are worried that if they sell, they won’t be able to get a new home in the region.
On the flip side, some buyers are selling and leaving. Kent said that in the last five months he has helped clients sell homes in San Diego County and move to Pennsylvania, Texas, Colorado, North Carolina and Nevada. He said all had some degree of wanting to “cash out” of San Diego, but they had other reasons too, such as being closer to family or disliking California’s politics.
Almost all home types hit new highs in February. The median for a resale singlefamily home was $740,000, exceeding the peak of $730,000 in October. Resale condos also hit a new record of $505,000, beating the previous record high of $485,000 in September. The newly built median — which includes condos and single-family — was $762,000. Its record was $812,500 in October 2018 when there was an increase in luxury, single-family homes for sale.
Here are some examples of what the median price in San Diego County can get a buyer:
• 1753 Harold Road: This 1,688-square-foot singlefamily house in Escondido is on the market for $669,000. It was built in 1989 and has three bedrooms and two bathrooms.
• 527 10th Ave., No. 409: This 1,395-square-foot downtown condo is listed for $699,000. It was built in 2005 and has one bedroom and two bathrooms. HOA dues are $515 a month.
• 619 Alveda Ave.: This single-family El Cajon home is on the market for $675,000. It was built in 1972, is 1,920 square feet, and has three bedrooms and two bathrooms.
• 6483 Corte La Luz: This 1,406-square-foot condo was built in 2002 and is on sale for $698,000. It has three bedrooms and 21⁄2 bathrooms. HOA dues are $255 a month.
Median home prices were up 14.8 percent annually for the year across the sixcounty Southern California region. They were up the most in San Bernardino County, increasing 17.7 percent for a new record median of $412,000.
It was followed by Riverside County, up 16.5 percent for a median of $465,000 (new peak); San Diego County, with the 14.6 percent increase; Los Angeles County, up 14.3 percent for a median of $708,500; Ventura County, up 13 percent for a median of $650,000; and Orange County, up 9.6 percent for a median of $820,000 (new peak).