COUNTY HOME PRICE HITS NEW HIGH: $750K
Demand remains strong while homes on market reach near-record lows
San Diego County’s median home price continued to climb in November to a new high of $750,000 as limited inventory put pressure on prices.
Local prices have risen 15.4 percent in a year, reported CoreLogic/DQNews on Thursday. The new median — which includes new and resale condos, townhouses and single-family homes — exceeds the peak of $749,750 reached in June.
There were 3,646 home sales in November — the lowest figure since February — as the number of homes on the market remained near record lows.
There were 2,738 homes for sale from Nov. 8 to Dec. 5, said the Redfin Data Center, its lowest level on record going back to 2017. Sometimes sales can exceed inventory in a given month when the process to close a sale, called escrow, takes more than a month. However, it is rare and reflects a sharp drop in homes for sale.
Steven Thomas, founder of real estate tracker Reports on Housing, said limited inventory means hopeful buyers in San Diego County will continue to make offers above the asking price, driving up costs.
“It is not going to get easier anytime soon for buyers,” he said.
Thomas said it is unlikely the situation will get better in the next year with potential sellers keeping homes off the market for a variety of reasons: Rising COVID-19 cases, a lack of San Diego homes to move to if sellers decide to part with current properties and, in the short term, homeowners unlikely to put homes on the market during the holidays.
He also said mortgage rates are anticipated to rise in 2022, which could put pressure on buyers to get into a home before rates tick up further.
So far, rising interest rates have not seemed to deter buyers.
The interest rate for a 30year, fixed-rate mortgage was 3.07 percent in November, reports Freddie Mac, up from 2.77 percent the year before. The rate is up from December 2020’s average of 2.68 percent, which was the lowest in records going back to 1971.
Real estate agent Najla Wehbe Dipp said she feels bad for a buyer she is working with who has been looking for several months for a small condo in Carlsbad. She said they recently made an offer $50,000 above the $500,000 asking price for a roughly 750-square-foot condo but still lost out.
In addition to offering more money, they offered an eight-day inspection contingency and a 15-day close of escrow. Dipp said she got a call back from the listing agent who told her she received 12 offers and four of them waved all contingencies, which are designed to give buyers time to inspect the property to make sure their are no major problems.
“You can’t really compete with that,” she said. “I can’t advise my clients to not have an inspection contingency and be stuck with a problem in a few years.”
Dipp said she has spoken to sellers who may have considered putting homes on the market but are concerned they will have nowhere to go after. She said the best-case scenario would be if they are moving out of state, but it would be difficult if they want to stay in San Diego County.
“They are stuck with: Where do I go?” she said. “If you sell your house, you know you will be stuck in the same position as so many (home shoppers) out there.”
In November, Redfin said 64.5 percent of homes were off the market in two weeks. That’s up from around 54 percent at the end of summer.
Reports on Housing said
the quickest places for homes to sell are in Rancho Peñasquitos and San Carlos, where homes stay on the market an average of 11 days. That contrasts with downtown where homes stay on the market an average of 112 days.
Samantha O’Brien, a real estate agent with PorchLight, said she has some determined buyers during the holidays, but some of her clients have decided to take a pause in their search.
“The market is sort of freaking them out,” she said. “I think it’s because there is nothing on the market and every single property they see that they like ends up going for around 10 percent over asking. What they thought they would be able to buy is disappearing right in front of their eyes.”
Prices of all home types appeared to hold steady or
Sources: CoreLogic; DQNews
exceed previous highs in November. The median price of a resale single-family home was $820,500, down from the July peak of $840,000. Resale condos hit an all-time high of $590,000.
For newly built homes — including condos, townhouses and single-family —
the median was $714,000. That is short of the record of $812,500 set in October 2018, which reflected an increase in luxury single-family homes for sale.
Price gains were almost universal across Southern California in November. Riverside County had the biggest annual gain of 20.2 percent for a median price of $546,750.
It was followed by San Bernardino County, up 18.8 percent in a year for a new peak of $475,000; San Diego County with the 15.4 percent increase; Orange County, up 14.9 percent for a median of $919,000 (down $1,000 from peak); Ventura County, up 14.6 percent for a new peak of $755,000; and Los Angeles County, up 12.6 percent in a year for a median of $788,000, down $2,000 from its peak.