Monthly SD Market Snapshot
Home prices were consistently up again in most markets in 2018 but at reduced levels compared to recent years. High demand for few homes for sale fueled price increases, but evidence is mounting that inventory will finally improve in 2019. This may apply some downward pressure on prices for beleaguered home buyers. A fourth interest rate hike by the Federal Reserve in 2018 spooked the stock market to close out the year. The Fed has indicated that the number of rate increases in 2019 will be halved, which may be of little comfort to an already compressed consumer.Closed Sales decreased 19.9 percent for Detached homes and 32.5 percent for Attached homes. Pending Sales decreased 4.6 percent for Detached homes and 13.2 percent for Attached homes. Inventory increased 29.6 percent for Detached homes and 55.9 percent for Attached homes.The Median Sales Price was up 2.5 percent to $625,000 for Detached homes and 3.5 percent to $419,000 for Attached homes. Days on Market increased 14.7 percent for Detached homes and 52.0 percent for Attached homes. Supply increased 37.5 percent for Detached homes and 66.7 percent for Attached homes.Unemployment rates remained remarkably low again in 2018, and wages continued to improve for many U.S. households. It is generally good for all parties involved in real estate transactions when wages grow, but the percentage of increase, on average, has not kept pace with home price increases. This created an affordability crux in the second half of 2018. Housing affordability will remain an important storyline in 2019.
Housing affordability was a growing concern in 2018, and that is expected to intensify in 2019. Although inventory is poised to improve in 2019, the homes that become available may prove to be too costly for first-time buyers to afford. For the 12-month period spanning January 2018 through December 2018, Pending Sales in San Diego County were down 9.0 percent overall. The price range with the largest gain in sales was the $1,250,001 or More range, where they increased 6.4 percent.The overall Median Sales Price was up 6.2 percent to $568,000. The property type with the largest price gain was the Single-Family Homes segment, where prices increased 6.7 percent to $640,000. The price range that tended to sell the quickest was the $500,001 to $750,000 range at 25 days; the price range that tended to sell the slowest was the $1,250,001 or More range at 52 days.Market-wide, inventory levels were up 36.9 percent. The property type that gained the most inventory was the Condos – Townhomes segment, where it increased 55.9 percent. That amounts to 2.2 months supply for Single-Family Homes and 2.0 months supply for Condos – Townhomes.