According to recently released data from the Greater San Diego Association of Realtors (SDAR), the number of house sales in San Diego continued to decline in September while average prices lingered around seven figures.
In the county, there were 1,036 single-family detached home sales last month, down about 23% from August. The trade association discovered that sales were down almost 30% from September 2022.
According to SDAR, some of the regions with the greatest number of single-family home sales last month included Rancho Bernardo East, Oceanside North, Fallbrook, Valley Center, Oceanside East, and Ramona.
In a similar vein, sales of townhomes and condos fell by about 20% between August and September of this year, reaching a six-month low in the county. Realtors claim that 620 of these residences were sold last month.
This coincides with a sharp decline in San Diego’s active listings over the past year, highlighting the ongoing inventory shortage at the root of the area’s housing issue that has increased costs for both buyers and renters.
For the first time in the history of the area, the average home price in August was right at $1 million, up roughly 3.2% from July and 12.8% from August 2022.
The average cost of a single-family home dropped by roughly 1.6% last month, to $999,000. The average is still more than the previous record for the area, which was established just last April and was roughly $975,000, though.
These developments are attributed by real estate specialists to rising mortgage rates and the persistent lack of available properties. Because of the increasing competition, properties are selling for more money on average and are being on the market for shorter periods of time.
Since it costs more for them to purchase a new house, these market forces also deter prospective sellers from putting their homes on the market, thereby reducing the supply of properties accessible to potential buyers.
According to SDAR President Frank Powell, the housing affordability dilemma will exist as long as new home and community construction is continually delayed.
People are selling their residences more slowly now that interest rates have increased from 3% to nearly 7%, he continued. We will continue to have a sluggish market with record low inventory “unless the interest rates drop to around 5.5%.”
According to real estate firm Redfin, San Diego is already regarded as one of the most competitive and pricey real estate markets in the nation, with the majority of properties this year selling within 12 days of their listing.
Given that locals frequently see renting a property as a less expensive option, the housing market’s unaffordability has also facilitated developments in the rental sector.
Real estate experts assert that having readily available affordable housing has a domino effect that lowers the price of rival rental properties and homes on the market, making them more attractive options.