July 24, 2024

San Diego house prices are record high, mortgage rates pass 7%

With median home prices surging to $865,000 in San Diego County, it’s the second most expensive market in all of Southern California, according to CoreLogic data.

SAN DIEGO COUNTY, Calif. — San Diego home prices are surging to new highs, hitting an all-time record even as mortgage rates remain high.

According to new data from CoreLogic, a real estate analytics firm, the overall median home price in San Diego County rose to $865,000 in March. That median price includes homes of all types such as single-family, condos, and townhomes, and according to their numbers, it shows a 9.5% increase year-over-year since March 2023.

“Home prices continue to go up while sales activity continues to be relatively slow,” said Selma Hepp, chief economist for CoreLogic.

With home prices reaching new heights, CoreLogic says the San Diego market is the second most expensive in all of Southern California, only behind Orange County where the median price is around $1.15 million.

“The issue continues to be that we don’t have enough inventory and the pent-up demand from buyers is really strong, so we have more buyers in the market than we have sellers,” said Hepp, pointing out the challenging landscape for homebuyers, especially first-timers.

“In San Diego, home prices have been growing at a really fast pace over the last few years, even during the pandemic because of the migration patterns to the area,” said Hepp. “We see a lot of folks from the northwestern part of the U.S. and even the Bay Area of California moving down to the San Diego area.”

Despite surging prices, there were only 2,306 home sales in March across the County. That’s the second slowest March on record since 1988, only behind March of 2008. One of the factors impacting the rate of home sales is, of course, high mortgage rates that have crept up over 7% again.

“It really kind of constrains the market and creates this bottleneck because without people wanting to sell their homes, then there’s not enough inventory in the market for people to buy and that drives prices up,” said Spencer Lugash, president of the Greater San Diego Association of Realtors

Lugash told CBS 8 that one issue complicating the homebuying process here in San Diego, especially in fire or flood prone areas, is the ability to acquire insurance for a new home in order to close the deal and finalize the sale.

“It’s really becoming more of an issue, I mean, it’s been an issue but it’s becoming a significant problem for homeowners and for the market,” said Lugash. “Insurance is very difficult. We have more and more insurance companies moving out of California, not renewing policies.”

Despite some of the insurance and inventory headwinds, Lugash says there are still plenty of buyers who want to live here in San Diego.

“Sometimes we refer to it as the ‘sunshine tax,’ you know, we have beautiful weather, it’s consistent, beautiful beaches,” said Lugash. “It’s just a wonderful place to live and that creates desirability.”

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