Better sit down for this one, but San Diego’s housing market is setting records many thought impossible just a few years ago with the median price of a single-family home pegged at $975,000 in March by the Greater San Diego Realtors Association.
The median price for an attached home – condominiums and townhomes – in March was $646,085, according to the association.
More startling, Association President Chris Anderson predicted that the median price could break $1 million within three months.
“A little while ago, I was going, ‘Oh my gosh, half a million,’ and now it’s going to be double that,” Anderson said.
Since 2000, home prices for single-family homes and detached homes taken together have gone up by 275%, according to Clever, a real estate data company.
Nationally, home prices have risen by an average of 156%, the company reported.
“For San Diego specifically, those prices have greatly outpaced inflation,” said Danetha Doe, an economist with Clever. “Home prices keep wildly increasing.”
Because Clever mixes single-family homes and detached homes together, it comes up with a lower overall median price that the Realtors Association – $851,991 in 2022 compared to $228,853 in 2000.
Had home prices simply kept pace with inflation, that number in 2022 would be $374,000, Doe said.
“Avocado toast is not the reason why millennials are not able to afford a home,” Doe said.
Apartment List, a national rental reporting organization, said that a survey of millennials – people in their late 20’s to late 30’s – showed that in 2021 22% have given up ever owning a home and preliminary data for 2022 showed that even fewer millennials think they’ll own a home.
According to the Apartment List survey, of the millennials surveyed, 60% of those who said they wanted to buy a home had no money in their savings accounts for a down payment.
Making it even harder to buy a home, bankrate.com, a consumer financial website, reported that the national average interest rate on a 30-year, fixed rate mortgage climbed to a little more than 5.4% as of April 26.
Doe said that the rising interest rates could slow the escalation of housing costs, but she said it’s unlikely that prices will actually drop.
“San Diego is a tourist destination. There’s a lot of second home purchases,” Doe said.
Anderson said that homes in San Diego County continue to sell quickly with multiple offers because inventory is so low.
“What happens is you put in it the market and then there’s a flurry (of activity) and within three to five days, it goes into escrow,” Anderson said. “A normal market, a balanced market is where you have six months-worth of supply. We have like two weeks of supply.”
It’s not that people don’t want to sell, Anderson said, but with the inventory so low, finding a place to move is tough.
“I have been working with clients for over a year before they put their house on the market. They have to worry about where they’re going to go,” Anderson said.