Although there was a slight drop in San Diego house prices in July 2021, the decline wasn’t enough to raise the county’s housing market alarm. The slight dip to $730,500 was the first reduction in housing prices in six months. According to the latest California Association of Realtors (CAR) report, house prices and sales in the Southern California region (San Diego included) are still rising. So, the answer to whether home prices in San Diego are dropping is no.
San Diego Housing Market Trends
According to CAR’s report, the region’s housing market remained reasonably strong from October through November. It further reports that the median home price went up by double digits over the past twelve months, despite a drop in year-over-year sales growth. In October 2021, the median home price of a single-family home in San Diego increased by 13.5% from the previous year to $850,000, while the sales rate dropped by 8.3%.
While the inventory remains low, housing prices in San Diego continue to rise. One of the reasons why housing prices are rising in San Diego is low mortgage rates, which left the county’s housing market flooded with homebuyers. The rising demand can also be attributed to the desire of San Diego home buyers to have additional space. The low mortgage rates gave buyers more purchasing power because they can now direct most of their finances toward paying the principal. However, since the third quarter 2021, mortgage rates have started to increase, leveling purchasing power and dampening homebuyer urgency.
In their recent housing market report, Realtor.com claims there are more house buyers in San Diego than active listings, contributing immensely to current price increases. According to this report, in October 2021, San Diego homes sold for approximately the asking price. Also, home prices in San Diego County vary depending on the city and neighborhood–and there are 67 and 100, respectively, in San Diego County. La Jolla has the most expensive homes, while Spring Valley city has the most affordable houses. In terms of neighborhoods, East Village has the most affordable homes with a median listing price of about $500,000.
Overall, the median home price in San Diego is still up 15.2% this year. There have been record-breaking highs in price throughout the year, especially during the COVID-19 pandemic. According to CoreLogic, there was a peak in June when the median listing price reached $749,750. But it dropped by $19,250 in July before picking up again in August. Many realty market analysts termed the slight drop in median listing price a temporary blip. Some even claimed that the decline was not unusual because most parents won’t move in late summer when it is so close to the start of a new school year.
So, as a homeowner in San Diego, this is still the best time to sell your home. With the current high demand for homes in San Diego due to low mortgage rates, you are sure to find a buyer quickly and get a handsome offer. But be aware; CAR’s Vice President and Chief Economist Jordan Levine recently noted that the home prices in San Diego should normalize in the coming weeks and months as the housing inventory and mortgage rates increase in the third quarter. Apart from learning essential tips for moving out of state for the first time, you should also monitor and compare prices to know how much your house is worth.
The housing market in San Diego should normalize during the traditional off-season period–but it depends on the conditions of the housing market. As the market normalizes after the intense conditions experienced at the height of the COVID-19 pandemic, expect the next few months to be friendly to home buyers in San Diego with sales and low prices. According to Zillow, the inventory figures will rise again in the latter half of 2021 and continue into 2022. Before then, buyers may get some reprieve from the rising prices.
The database company further reports that over 45% of homes available in San Diego are currently selling above list price. There is also an argument that San Diego house prices are approaching peak levels. But an opposing view focuses on an affordability gap. This argument claims that homebuyers might not be able to afford the rising prices, thus forcing a period of price stability.
If current market conditions discourage you from selling your home in San Diego, you should consider selling it to Trusted House Buyers, a reputable family-owned company that buys homes in San Diego. Unlike other real estate companies and agencies, Trusted House Buyers will give you cash for your house, thus speeding up the closing process. Also, the company buys distressed homes without demanding repairs, and it eliminates agent commissions. This way, you can make money from the sale. Check out Trusted Home Buyers today! Need tips for moving out of state for the first time? Click this link.