June Housing Market Update for San Diego

June Housing Market Update for San Diego

If you've heard your grandparents or other baby boomers reminisce about how tough it was to buy a home back in their day, it's time to share some updated insights. Today, the median home price has skyrocketed while income growth remains largely stagnant. And if you're living in San Diego, the median home price is nearly double that of the national average, although incomes haven't quite kept pace.

Let's dive into the latest San Diego housing market data for June. This comprehensive update covers three key metrics: median sales price, days on market, and inventory of homes for sale. Additionally, we'll examine recent mortgage rate trends and conclude with some actionable tips for buyers and sellers.

Median Sales Price

First, let's talk about the median sales price. This metric often serves as the most popular indicator of market health. For May, the median home price for single-family homes in San Diego was $1,191,750. This figure marks a slight decrease from April's $1.1 million but isn't statistically significant month over month. For condos and townhomes, May's median price was $685,000, down from April's $686,000.

Looking at year-over-year data, the picture changes significantly. From May 2023 to May 2024, single-family home prices surged by 14%, from $955,000 to $1,191,750. Condos and townhomes saw a 7% increase in the same period. Despite the fluctuations in mortgage rates and market uncertainties, home prices have continued to climb, indicating robust market demand and limited supply.

Historical trends show a gradual upward movement in median sales prices with occasional dips. However, these dips are typically short-lived, followed by quick rebounds. This trend underscores the ongoing appreciation in home values in San Diego.

Days on Market

Next, let's explore the days on market (DOM), which measures how long it takes for homes to sell. This average metric includes all of San Diego County. For May, single-family homes averaged 27 days on the market, while condos and townhomes averaged 26 days, a slight decrease from previous months.

Year-over-year data reveals a significant increase from 2022 to 2023, with single-family homes averaging 29 days on the market, compared to 27 days in 2024. Condos and townhomes also saw an increase from 16 days in 2022 to 26 days in 2024.

Historical data shows a general trend of decreasing days on market, with some peaks and valleys. This trend indicates that homes in San Diego are selling relatively quickly, even as prices continue to rise.

Inventory of Homes for Sale

The inventory of homes for sale is a crucial metric for understanding market dynamics. As supply increases, prices typically stabilize or decrease. However, San Diego often defies these economic principles.

In May 2023, there were 1,866 homes on the market. This number rose by 30% to 2,426 homes in May 2024. Despite this increase in inventory, median home prices also saw a 14.3% rise from 2023 to 2024, defying the typical supply-demand relationship.

The historical inventory data suggests that while there have been increases, it's unlikely that inventory levels will return to those seen in 2019 or earlier. This sustained demand keeps prices high, even as more homes become available.

Mortgage Rates

Mortgage rates play a pivotal role in housing affordability. Conventional loan rates fluctuated throughout May, starting at 7.22% and reaching a low of 6.94% before ending at 7.03%. These rates have remained relatively stable over the past year, hovering between 6.5% and 7.5%.

The stability in mortgage rates contrasts with the predictions of significant rate drops. For those waiting for lower rates to buy, it's essential to consider that while rates may not drop significantly, the steady increase in home prices could diminish purchasing power over time.

Tips for Buyers and Sellers

For those looking to buy a home, finding a great deal often involves identifying human errors in listings. Homes that are misrepresented in MLS can be opportunities. Ensure your realtor is actively searching for these discrepancies.

For sellers, be wary of the reverse bid strategy. Overpricing your home to attract higher bids can backfire, leading to longer market times and potentially lower sale prices. Pricing your home accurately from the start will attract more offers and result in a faster, more profitable sale.

Finally, a noteworthy legislative update is the introduction of AB 968, aimed at real estate flippers. This new law targets those who buy and sell homes within 18 months, holding them accountable for any issues with the property.

Conclusion

San Diego's housing market remains strong, with rising prices, quick sales, and a stable yet high mortgage rate environment. Whether you're buying or selling, staying informed and working with knowledgeable professionals can help you navigate this dynamic market successfully.

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