Home prices in San Diego County have now fallen for five months in a row.
CoreLogic said Tuesday that the median home price in October was $775,000. It reached an all-time high of $850,000 in May, but the market has slowed significantly with rising interest rates.
From September to October, San Diego County’s median home price fell 2.2 percent, making it one of the largest monthly declines in Southern California. The median – the point where half of all homes sold for more and half for less – combines all sales of single-family homes, condos and townhomes.
Home prices have fallen nationwide, but the most expensive markets like San Diego are falling the fastest. Although prices have come down, higher interest rates mean higher monthly payments.
Jan Ryan, a Ramona-based RE/MAX agent, said she usually has four to six homes in stock at any given time. Now he has none. Ryan said he’s seeing many potential buyers struggling financially with higher interest rates, and many sellers having difficulty accepting that sales prices are now lower.
“The craziest thing is that inventory is still low,” he said. “Sellers are keeping the prices up instead of reducing it, hoping that things will change in future. Some are taking (homes) off the market and waiting for spring.
The interest rate for a 30-year fixed-rate mortgage was 6.9 percent in October, up from 3.07 percent a year earlier, according to Freddie Mac. Assuming a 20 percent down payment, the monthly payment on a $775,000 home in San Diego County would have been about $2,920 this time last year, which is more than $4,366 today.
San Diego had one of the fastest growing home values in the country for much of the pandemic. Prices continue to rise by 5.4 percent a year. However, this is very different from May, when it had increased by 17.2 per cent.
Redfin Data Center said the average days on the market for a San Diego County home to sell was 28 days in October. This is an increase from nine days at the beginning of the year. Redfin said nearly 46 percent of listed homes have declined in price — compared to 12 percent in January.
Home inventory is falling as more homes are taken off the market. Redfin said 5,007 homes were listed from October 3 to October 30. There were about 6,000 listings at the end of July.
Lawrence Yoon, chief economist for the National Association of Realtors, recently made the prediction. that home prices will continue to rise modestly in 2023—1 percent—because inventory is so low. He also predicted that prices would increase by 5 percent in 2024.
Yun said the country will not see a Great Recession-style drop in prices because there are fewer homes available today than at that time. For example, in San Diego County, 17,306 homes were built in 2004, up from 8,053 so far this year. Meanwhile, at that time the population increased by about 356 thousand people.
Here’s how San Diego County home prices changed in October by home type:
- Single-family home resales: 1,392 sales with an average of $842,000. This is down from a high of $950,000 in April.
- Condo Resales: Averaged $628,500 with 727 sales. This is down from a record high of $663,000 in May.
- New Construction: Averaged $840,000 with 203 sales. This figure combines single-family homes, townhomes and condominiums. This is down from the August high of $890,500.
Almost all of Southern California saw a drop in prices from September to October. Riverside County had the biggest decline, down 2.7 percent to a median of $545,000.
This was followed by a 2.2 percent decline in San Diego County; Ventura County, 1.3 percent for a median of $755,000; San Bernardino County, down 1 percent to $490,000; and Orange County, down 0.1 percent to a median of $950,000. Los Angeles County rose 0.2 percent to a median of $801,500.