San Diego home price, $645K, down slightly in December

San Diego County capped off a year of substantial home price increases — up 12.2 percent annually — with a slight decrease in December.

The median price was $645,000, down by $5,000 from the last few months, said CoreLogic data provided by DQNews. A drop in prices in December and January are typical, although any decrease in prices are notable in a year that saw San Diego prices go up among the fastest in the nation.

Prices have not increased since September but analysts say it is nothing to write home about: Demand is still very high in San Diego with limited supply and no signs point to price growth abating. A January CoreLogic forecast predicted home prices in San Diego would increase the most in the nation this year, up 8.3 percent.

“I see prices going up in front of my eyes,” said Samantha O’Brien, a real estate agent with PorchLight in University Heights.

She said the market is good for her because so many people want to buy homes. But it’s also frustrating because it’s tough to get offers accepted. Part of her job, O’Brien said, is just trying to keep morale up for her clients.

For instance, she was unsuccessful working with a buyer a few weeks ago to buy a ground floor, two-bedroom condo in El Cajon that was built in 1977 — not exactly what one might consider the hottest property on the market.

They put in an offer for $380,000, which was $30,000 over the asking price, but were beat out by a higher offer. The final price for the property is not in the public record yet, but she assumes the sale was near $400,000. She said she tries to encourage clients to not give up, and did get two offers accepted this week.

Agents and analysts say a few things are driving demand: Record low mortgage rates, a strong desire to have a better home from stay-at-home workers and Californians priced out from other areas — especially San Francisco and Los Angeles — moving to San Diego for a better deal.

In December, the interest rate for a 30-year, fixed-rate mortgage was 2.68 percent, said Freddie Mac, down from 3.72 percent the year before. That is the lowest in records going back to 1971.

Alan Gin, an economist at the University of San Diego, said the price increases reflect an uneven COVID-19 economy that has strongly favored people who were doing better than others before the pandemic. He said many already affluent San Diegans have been able to do their jobs from home, and benefited from large gains in the stock market. This is while the other half of the economy were hit hardest by job losses throughout the pandemic.

“People at the upper end have been able to maintain, if not increase, their economic standing,” he said. “As a result of that, they can afford to buy these houses and push prices up.”

Gin predicted a better economy for everyone later this year once vaccines have substantially increased— likely benefiting all segments of the population. However, he said wealthier San Diegans will likely get more wealthy and continue to put upward pressure on prices.

There were 4,174 home sales in December, up 27 percent from the same time in 2019. That happened at the same time there were record low levels of homes for sale.

The Redfin Data Center said there were only about 3,690 homes listed from Nov. 30 to Dec. 27. That is compared to 5,741 around the same time in 2019; 8,065 in 2018; and 5,724 in 2017. It isn’t a complete apples-to-apples comparison — because some sales that took place in November did not complete escrow until December — but it reflects how few properties there are when there were more recorded sales than active listings.

Here is how the different home types fared:

• Single-family resale: A median of $715,500, down from a record high of $730,000 in October. There were 2,581 sales.
• Resale condos: A median of $480,000, down from the record high of $485,000 in September. There were 1,259 sales.
• Newly built: A median of $676,250 with 334 sales. The newly built numbers include condos and single-family homes so it is heavily impacted by, for example, a new townhouse project instead of single-family home. For instance, the median hit a record $812,500 in October 2018 when there was an increase in luxury, single-family homes for sale.

Across the six-county Southern California region, median home prices were up 10.1 percent for the year. Ventura County had the biggest increase — 14.2 percent — for a median of $650,000.

It was followed by San Bernardino County, up 12.7 percent to a median of $400,000; San Diego County’s 12.2 percent increase; Los Angeles County, up 11.4 percent for a median of $700,000; Riverside County, up 11.2 percent for a median of $442,500; and Orange County, up 8.2 percent for a median of $795,000.