San Diego County’s median home price dropped for the second month in a row in August, to $725,000, as competition slowed — but experts said not to expect a crash, or a big slowdown, anytime soon.
The median is the point at which half the homes sold for more and half for less.
Despite the recent dip, prices are up 13.3 percent in a year in San Diego County, according to CoreLogic/DQNews, though the median is down from a peak of $749,750 in June. The San Diego area isn’t alone, with price gains slowing across Southern California.
A large factor appeared to be more homes going on the market and fewer competing offers as summer came to a close. However, housing analysts mostly shrugged off the reduction as temporary, with the same factors in place that could push prices up: lack of homes for sale, low mortgage rates and improved finances of professional workers.
Other factors at play in August might not be a reflection of the market. For one, it’s typical to see a slowdown around August as children go back to school. Increased condominium sales that month also may have affected the median price because they cost less than single-family homes.
Mark Goldman, a real estate analyst with C2 Financial Corp, said annual double-digit price gains during the COVID-19 pandemic were not likely to last long-term. Yet he said wages are up in San Diego County, inventory is still tight and mortgage rates remain low, probably making any reduction short-lived.
“The market had been going up 25 percent. That’s just not sustainable,” Goldman said. “But are prices going to back off? I don’t think so. The worst-case scenario is prices would be stable, but the more likely scenario is they will continue to increase.”
Competition for homes might have been affected by slightly more homes for sale in August. There were around 3,500 homes on the market to start 2021, which led to strong competition and offers over asking price. Home inventory has been climbing recently, with 4,429 homes listed for sale from Aug. 2 to Aug. 29, according to the Redfin Data Center. That was down from 5,723 around the same time last year and 8,407 in 2019.
Samantha O’Brien, a real estate agent with PorchLight, said she has noticed more homes on the market and reduced competition. She competed with only one other offer for an $890,000 townhouse in August, which she said would have had 10 to 12 offers in May and June.
“It doesn’t feel as intense as it was a few months ago when there were multiple offers and insanity,” she said.
However, even if things are slowing a bit, the number of listings is still low and it’s not like competition has disappeared entirely, O’Brien said. She said she listed three homes for sale in August that all had multiple offers.
In addition to the desire to own property in San Diego County, O’Brien said low interest interest rates continue to be a major motivator.
The interest rate for a 30-year fixed-rate mortgage was 2.84 percent in August, according to Freddie Mac, down from 2.94 percent a year before.
Not all home types showed signs of cooling in August. The median price for a resale condo hit an all-time high of $565,000, up from its previous peak of $561,000 in June.
Brett Dickinson, a real estate agent with Compass, said he has steadily seen more interest in condos as the single-family home price became out of reach for many of his clients.
“The prices for [single-family homes] were off the chart, exorbitantly high,” he said of the market in August. “And the inventory wasn’t that great.”
The median price for a resale single-family house was $820,000, down from its peak of $840,000 in July. Newly built homes, which include new single-family and condos, hit a median of $734,000.
Prices were down or flat across most of Southern California in August but up 14 percent year-over-year in the six-county region.
Los Angeles County dropped the most month-over-month, 1.3 percent, with a median of $785,000. It was followed by San Diego County with a 0.7 percent reduction; Orange County was down 0.6 percent with a median of $900,000; and Riverside County was flat with a median of $525,000.
Two counties saw prices rise — Ventura County was up 1.1 percent for a median of $740,250, and San Bernardino County was up 2.2 percent for a median of $465,000. ◆
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San Diego County median home price drops for second month in a row, to $725,000 - La Jolla Light
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