Amid COVID-19, San Diego County’s median home price hits highest ever: $600,250
COVID-19 could not stop the upward pressure on the median home price in San Diego County, which reached a new high of $600,250 in June.
The price crossed the $600,000 line for the first time in June, according to CoreLogic data provided by DQNews. It represents a modest 1.7 percent price gain in a year but is noteworthy as unemployment is at historic highs.
The biggest factor in rising prices is sellers taking homes off the market during the pandemic and causing price wars among buyers. Other factors include a strong desire for homeownership as many are working from home, plus low mortgage interest rates and home construction in San Diego County that is at Great Recession levels.
San Diego was not alone in this phenomenon, with three of the six Southern California counties reaching record price peaks in June.
Real estate analyst Gary London said increased prices are a direct result of a low number of homes for sale. Also, he said homebuilding in the county has been reduced in recent years, so it’s not like there are more homes to make up the difference. There were 8,053 homes built in the county in 2019 — the fewest since 2014.
“It’s all about scarcity,” London said. “We have a supply-and-demand imbalance.”
There were 4,786 homes listed for sale in San Diego County from June 8 to July 5, according to the Redfin Data Center, a drop of 37 percent from the same time last year. However, sales increased in June, hammering home that buyers are willing to pay more than the asking price.
June saw 2,239 home sales, according to DQNews, down 1.6 percent year-over-year but up greatly compared with the previous few months. From May to June, home sales rose 56 percent.
Real estate agent Evan Morris said sellers are unlikely to want to put homes on the market with COVID-19 still out there.
“Sellers are at home, in place, and not selling unless they absolutely have to,” Morris said.
The resale single-family home median price in San Diego County hit a record high of $655,500, surpassing the previous peak in April by more than $5,000. The resale condominium median was $449,500, down by $4,750 from its peak in April. Newly built homes remained a fraction of the market with 317 sales, for a median of $622,500.
Conventional wisdom may say San Diego County’s June unemployment rate of 13.9 percent, near a record high, would affect the market, but not so, many analysts say. London said a lot of low-income workers who lost jobs during the COVID-19 stay-at-home orders are renters and not in the market for homes. He said the job losses are much more likely to affect the rental market before impacting home prices.