Drumbeat please! Once again, median home prices have climbed to a new high in San Diego. The San Diego Association of Realtors, who track the statistics like baseball fanatics, reported that the May, 2017 median topped the $600,000 mark for the first time in this decade. The 2005 peak of $517,500 when adjusted for inflation would equal a 2017 price of $644,500. Nonetheless, $600,000 + is a major milestone and a boon to sellers and realtors. Buyers, not so much.
Why the buying frenzy? As we’ve reported before, a lack of inventory does make the available listings more precious. So too the slow pace on building new houses. Interest rates have pretty much held at low levels, but there is always the idea that they ultimately will rise. Getting a purchase consummated before that happens adds to the willingness to pay that seller’s market premium price.
2,200 single family houses sold in May, with the median price of $612,500 up eight percent from the previous year. Though May of 2017 topped April, 2017 in volume of sales, number of sales were down 6.1 percent from 2018. So, prices up, volume down; that pretty much tells the story. The median sales price for condominiums and town homes was also a record at $394,000 and a healthy 1,200 properties changed hands in the month.
How did San Diego fare in comparison to other top markets? It was reported that price increases were up all around, with the lowest increases in the already pricey Washington, D.C. and New York. They saw increases in the four percent range.
San Diego came in ninth and beat out Las Vegas, Chicago and Miami for price increases. But it couldn’t touch the hottest climbing real estate markets of Dallas, up eight percent; Portland, up nine+ percent and Seattle at a whopping 12.3 percent. The Northwest continues to be a draw, perhaps for that cool piney climate.
Looking to the future, we can’t help but wonder how high prices can go? We are already at the point of absolute affordability, with salaries remaining fairly flat. It’s just that with so little inventory available, and almost 20 percent of the home purchases going to investors (this is a third less than the 30 percent investor market back in 2013) anyone who’s considering a home purchase just doesn’t have that much choice. It’s buy now and buy high, or wait and find that interest rates have finally turned up and homes are even more expensive.
Let’s face it, California is a highly desirable place to call home. All of Southern California saw price increases this year. San Bernardino was up nine percent. Riverside County 7.9 percent, Los Angeles 5.8 percent; Ventura County 5.5 percent and Orange County 4.7 percent. San Diego at 7.4 percent was right in the middle.
Enjoy the good life!
