San Diego home price keeps breaking records. Its new high: $650K

San Diego County continued its pandemic home price climb in September, reaching a new record high of $650,000.

The median price has increased 10.2 percent since COVID-19 stay-at-home orders began in March, according to CoreLogic data provided by DQNews. It marks some of the quickest acceleration of prices since the region came out of the Great Recession in 2013 and 2014. September’s number breaks the previous record of $640,000 in August.

Home prices have gone up nationwide for similar reasons analysts continue to point to: A lack of homes for sale leading to price wars; Extra importance put on ownership for workers stuck doing jobs from home; and record low interest rates.

Selma Hepp, CoreLogic deputy chief economist, said a lack of properties for potential homebuyers to chose from is prevalent across Southern California.

“With inventories 50 percent below last year’s levels, heightened demand is putting a strong pressure on home prices,” she said.

From Sept. 7 to Oct. 4 there were 5,191 homes listed for sale in San Diego County, said the Redfin Data Center. That’s down from 7,949 around the same time in 2019 and 9,341 in 2018.

Hepp said it is possible demand will slow in coming months as we enter the traditionally slower holiday buying season.

Taking into account the COVID price acceleration, prices have now increased 14 percent in a year. The last time prices went up that fast in a year was February 2014 as the region quickly came out of the Great Recession.

One difference from back then is historically low interest rates. In September, the interest rate for a 30-year, fixed-rate mortgage was 2.89 percent, said Freddie Mac, down from 3.61 percent the year before.

Despite the obvious benefit of lower rates, not all real estate agents say it is the first thing on buyers’ minds. Bonnie Phelps, a real estate agent based in Palomar Mountain, said they are getting a lot of buyers who are working from home and seeking a more isolated place to live away from the city.

“The first thing they ask about is Internet access,” she said.

Like other areas of the county, Palomar Mountain — which has Internet access — is getting an influx of buyers, many of them essential workers who have been doing jobs from home. The only problem, Phelps said, is there are just six properties for sale on the entire mountain and not enough for all the potential buyers calling.

Raylene Brundage, an agent who sells in several North County communities, said she is also seeing an influx of buyers who have been working from home for months and want to get a permanent place.

“Their home is really important to them,” she said.

Brundage said a lot of her buyers are young professionals who are buying their first home and willing to put down big down payments. And they aren’t necessarily all from San Diego. She said a lot of interest lately is from the San Francisco Bay Area and Los Angeles because homes are less expensive here in comparison.

There were 4,317 home sales in September, reflecting a steady climb from April when a combination of low inventory and buyers staying away during the start of the pandemic led to just 2,499 sales.

The price for a resale single-family home was unchanged from last month at $715,000; The resale condo median reached $485,000, a new record; The newly built home median — which includes condos, townhouses and single-family homes — was $728,000, down from the record $812,500 in October 2018 when there was an increase in luxury, single-family homes for sale.

Here’s a few examples of what $650,000 can get you in San Diego County:

• 2344 Montcliff Road.: A 1,984-square-foot home on sale for $643,000 in Paradise Hills. It has five bedrooms, three bathrooms and was built in 1983.
• 4130 Haines St., Unit 5B: This 870-square-foot condo in Pacific Beach is listed for $650,000. It has two bedrooms, 1 1/2 baths and was built in 1973.
• 461 Arizona St.: This 2,300-square-foot house in Chula Vista is listed for $650,000. It has four bedrooms, two bathrooms and was built in 1969.
• 5983 Gaines St.: A 1,601-square-foot townhouse near Fashion Valley for $649,900. It has three bedrooms, 2 1/2 baths and was built in 1980.

Across the six-county Southern California region, home prices rose 15.3 percent annually in September. The biggest gainer by percentage was Los Angeles County, which increased 14.5 percent to a median of $710,000.

It was followed by Riverside County, up 14 percent (tied with San Diego County) for a median of $447,000; Ventura County, up 12.9 percent to a median of $665,000; San Bernardino County, up 12.8 percent for a median of $397,000; and Orange County, up 8.6 percent to a median of $785,000.