SAN DIEGO — The number of home sales in San Diego continued a downward trend in September as average prices hovered around seven digits, according to newly released data from the Greater San Diego Association of Realtors (SDAR).
Sales of single-family detached properties totaled 1,036 in the county last month, falling nearly 23% from August. Compared to September 2022, the number of sales came in roughly 30% lower, the trade association found.
Rancho Bernardo East, Oceanside North, Fallbrook, Valley Center, Oceanside East and Ramona were among the areas with the most single-family home sales last month, according to SDAR.
Similarly, townhomes and condos have also saw a roughly 20% decrease in sales between August and September this year, hitting a six-month low in the county. According to realtors, sales of these properties totaled about 620 last month.
This comes as the number of active listings on the market in San Diego has also plummeted over the last year, underscoring the continued lack of inventory at the center of the region’s housing crisis that has driven costs for both buyers and renters up.
In August, average home prices came in right at $1 million for the first time in the region’s history, rising about 3.2% from July and 12.8% from August 2022.
Last month, the median single-family home price dipped about 1.6%, falling to $999,000. However, the average still sits above the region’s previous record — about $975,000 — set just last year in April.
Real estate analysts attribute these changes to rising mortgage rates and the ongoing scarcity of homes on the market. As a result, homes are sitting on the market for a shorter amount of time due to increased competition, with the majority selling for above their asking price.
These market pressures also discourage potential sellers from putting their homes on the market since it’s more expensive for them to buy a new property, further limiting the inventory available for prospective buyers.
“As long as construction of new homes and neighborhoods remains consistently slow, the housing affordability crisis will continue to persist,” said SDAR President Frank Powell.
“The rise in interest rates from 3% to over 7% has caused people to sell their properties more slowly because of the record rates,” he continued. “Unless the interest rates drop to around 5.5%, we will continue to see a slow market with historically low inventory.”
San Diego is already considered one of the most competitive and expensive real estate markets in the country, according to real estate company Redfin, with most homes this year selling within 12 days of their listing.
This unaffordability in the housing market has also facilitated changes in the rental market as well, given that residents often look to leasing a unit as a cheaper alternative.
According to real estate experts, having accessible affordable housing sets off a chain-reaction that drives the price of competing rental units and homes on the market down to make them more viable options.
As housing analyst Ken Kaplan explained to FOX 5 last month, “if we can get more units on the market, (that) is going to create a surplus inventory of rentals, which would mean landlords would have to come off the price a little bit.”
“Then at that point, if it makes more sense to rent than buy, sellers are going to be sitting on the sidelines going, ‘Wait, we need to kind of adjust, so that we can bring people who are renting into buying’” he continued.