Resale home prices hit an all-time high
Experts say low inventory in county upped competition despite higher interest rates
Homeowners with lower mortgage rates than current rates are keeping their homes, placing inventory at historic lows. (K.C. Alfred U-T file)
By Phillip Molnar
The price of a resale single-family home in San Diego County hit a record high in August of $958,000.
August’s new peak, said CoreLogic data released today, beat the previous record reached in April 2022 by $8,000. Experts say the lack of homes for sale has made competition on the resale market even stronger — despite rising mortgage rates.
Resale condos also hit a new high of $680,000. Current homeowners, with lower mortgage rates locked in, are less likely to put homes up for sale at the moment, pushing inventory to historic lows.
Sales have remained at significant lows for several months. There were 2,617 home sales in August, the lowest for that month in records going back to 1988. The closest was 2,741 sales in August 1992.
Mark Goldman, a real estate analyst with C2 Financial Corp., said there are more things pushing prices up than down: a healthy job market, millennials forming families and strong demand for houses.
“The only downward pressure is mortgage rates,” he said. Goldman said it’s possible prices could go up further if interest rates start to come down, but betting on when rates will drop hasn’t worked out for many analysts. The Mortgage Banking Association forecast in January that rates would be 5.4 percent in the third quarter.
In the last week of August, the average interest rate for a 30-year, fixed-rate mortgage was 7.18 percent, said Freddie Mac . That was up from 5.55 percent at the same time last year.
The price of a resale single-family home, assuming a 20 percent down payment, has gone up considerably as a result of rates. The monthly payment would have been around $4,634 last year, compared with $5,475 in August.
Jeff Grant, owner and agent with Sand & Sea Investments, said August was the first month in a decade that he didn’t have any transactions. He said the year, on average, went pretty well for him, but August was particularly difficult. Grant said many potential sellers have locked in low-interest rates and are only selling if there has been some immediate need, like a death or a divorce.
Around 3,390 homes were listed for sale in August, said the Redfin Data Center . That’s down from 5,719 at the same time last year.
Grant said hehas been working with a Chula Vista client who is very well qualified to buy a condo or townhouse in the $700,000 range but keeps running into multiple-offer situations.
“She’s been getting beat out left and right,” he said. There have been some signs of a slight softening in the market in recent weeks, likely the result of mortgage rates still rising. In August, Redfin said only about 4.8 percent of San Diego County homes had a price drop, compared with 5.8 percent in the last four weeks. Also, the median number of days on market in August was around 14, compared with 15.7 days in the last month.
One way to lower the monthly cost of a home is to come up with a higher down payment. San Diego County homebuyers were putting an average of 30 percent down in the second quarter, said research from housing firm London Moeder Advisors, up from 28 percent two years ago. Buyers in Solana Beach were putting down the most, 47 percent, followed by Encinitas (46 percent), Del Mar (42 percent), San Marcos (34 percent), and Poway and Carlsbad (32 percent). Buyers putting down the least amount were in Lemon Grove, at 11 percent, and National City, at 12 percent.
The data was part of a report on the future of single-family housing, which showed California had typically built from the 1950s onward about 60 percent single-family houses, and 40 percent multifamily (apartments, condos, townhouses). It said trends showed California heading toward building 90 percent multifamily, making a single-family home more rare.
The overall median price for San Diego County was actually down 1.2 percent in August to $840,000. That was entirely the result of newly built home prices dropping by nearly 40 percent to a median of $731,250. CoreLogic’s newly built median combines all new single-family homes, townhouses and condos. There was an influx of luxury single-family homes in the previous month that went for sale, lifting the median considerably higher, compared with August with mainly townhouses.
The median home price — the point at which half the homes sold for more and half for less — was largely up across Southern California in August. The figure combines prices for resale and newly built single-family homes, condos and townhouses.
Here’s a look at the median prices across the region.
Los Angeles County: Flat monthly for a median of $830,000; up 1.2 percent for the year.
Orange County: Monthly rise of 1.5 percent for a median of $1.1 million; annual rise of 10.3 percent.
Riverside County: Up 1.8 percent monthly for a median of $560,000; annual decrease of 0.5 percent.
San Bernardino County: Monthly rise of 3.1 percent for a median of $495,000; up 2.1 percent for the year.
San Diego County: Monthly drop of 1.2 percent for a median of $840,000; up 5.1 percent for the year.
Ventura County: Up 0.3 monthly for a median of $818,500; up 5.1 percent for the year.
2,617 home sales in August, the lowest for that month in records going back to 1988
7.18% average interest rate for a 30-year, fixed-rate mortgage in the last week of August
3,390 homes listed for sale in August, down from 5,719 at the same time last year