San Diego County’s median home price gains stall
The median price in the county did not increase in October — a rare occurrence in 2020.
San Diego County’s median home price in October did not increase from the previous month — the first time that has happened since May.
The median price for all homes — single-family, condominiums, townhouses — was $650,000, unchanged from September, according to CoreLogic data provided by DQNews. The price is up 13 percent in a year, but the number marked a rare slowdown in price appreciation that has defied expectations throughout the COVID-19 pandemic.
Many of the circumstances that experts say have driven up prices across the nation are still present: record-low mortgage rates, lack of home inventory and desire to own a home as many people are stuck working outside offices.
Mark Goldman, a real estate analyst with C2 Financial Corp., said one month’s worth of data is probably nothing to write home about yet. He said the fundamentals of the housing market haven’t changed and are unlikely to stop the upward pressure on prices.
“Most indicators of housing demand continue to remain strong,” he said, “so this one data point, which is something to be aware of and something to watch, is not necessarily a harbinger of the market turning.”
Goldman said there are things that could push the home price up in coming months, such as optimism about the development of a COVID-19 vaccine or (depending on your political persuasion) a new president. However, he said fear from potential buyers that the economy may take a turn for the worse, or concern that the housing market is at its high point, could lower prices.
One factor that didn’t change in October was a lack of homes for sale in San Diego County, which experts point to as the primary reason for rising prices. There were 5,058 homes listed for sale in the county from Sept. 28 to Oct. 25, according to the Redfin data center. That was down from 7,651 around the same time last year and 9,312 in 2018.
Real estate agent Gary Kent said news of a vaccine and its potential widespread distribution could mean sellers who are on the fence could put homes on the market and increase inventory. He said he has spoken with potential clients in the past few months who were waiting because of the coronavirus.
Kent said increased supply could mean there is less upward pressure on prices, but he — similar to many housing experts — was hesitant to say that prices could actually decrease. But it might make the process of buying a little easier.
“I don’t at all see some massive price drop,” he said, “but people might say, ‘I don’t have to make an offer the first day over list price and maybe I could negotiate a bit.’”
Despite the overall median price stalling, the main part of the San Diego County market hit a new high. The resale single-family home median hit $730,000 in October, its highest ever and up from $715,000 in September and August.
The resale condo price fell $10,000 from its peak in September to $475,000. The newly built home median was $726,000, down from the record $812,500 in October 2018, when there was an increase in luxury single-family homes for sale.
There were 4,292 home sales in October, roughly the same level it has been for four months. It is a stark contrast to April, when there were 2,327 sales, the lowest in years — the result of homes being pulled off the market as the pandemic took hold.
Interest rates have never been lower, but it doesn’t necessarily mean homes are cheaper. In October, the interest rate for a 30-year fixed-rate mortgage was 2.83 percent, according to Freddie Mac, down from 3.69 percent a year earlier.
That means the monthly cost of a median-priced home now would be around $2,430 a month, assuming 20 percent down on a 30-year fixed-rate loan and including property taxes and home insurance. That’s up slightly from roughly $2,390 a month for a median home at last year’s prices and interest rates.
However, that scenario would require a roughly $130,000 down payment, compared with $114,600 a year earlier.
Across the six-county Southern California region, the median home price was down 0.8 percent. Orange County had the biggest monthly increase, 1.3 percent, to a median of $795,000.
It was followed by San Bernardino County, up 1 percent for a median of $400,000, and Los Angeles County, up 0.7 percent to a median of $715,000. Ventura County was down 1.5 percent for a median of $655,000, and Riverside County was down 0.6 percent for a median of $445,500.