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Friday, Feb 3, 2023
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Housing Market Exits 2021: Prices Up, Inventory Down

Contrary to historical trends, San Diego County housing prices continued to rise as 2021 came to a close, even with the looming likelihood that interest rates will rise.

“We had a little lull during the holidays. It’s picked up again,” said Chris Anderson, incoming president of the Greater San Diego Association of Realtors.

Demand remained so high that homeowners were still getting multiple offers and some could ask for $10,000 above the highest comparable sale in their neighborhood and still get it, Anderson said.

“Now that the interest rates are going up, it might switch that off a bit. You might have to go a little lower,” Anderson said.

At the end of January, 30-year fixed-rate mortgage interest rates were about 3.55%.

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Rising interest rates could knock some potential buyers out of the market, but demand is so high and inventory so low that Anderson said she doesn’t expect to see prices actually decline.

“I do see the sense of urgency still of buyers wanting to get into this market. If they qualify, they want to find a house,” Anderson said.

 Multiple offers will likely remain the rule, she said.

“Instead of getting 10 to 20 offers, you might get five or 10,” Anderson said.

14.1% Increase

As of December, the median price of a single family home in San Diego County was $850,000, a 14.1% increase over December 2020, according to the Association of Realtors.

Similarly, the median price of attached homes – condominiums and townhomes – was $585,000, a 19.4% increase over December 2020.

Indicating just how hot the market was, the association reported that the time that a single family house stayed on the market dropped in December from 25 days a year ago to 22 days.

Meanwhile, the inventory of single family homes on the market in December was down 51.6% from December 2020 with 938 homes listed for sale compared to 1,939 a year ago.

“Normally we have more inventory as Christmas is over, we get this surge of inventory,” Anderson said.

This time, there was no surge.

“A couple of people thought it was because of COVID. They (sellers) were holding off saying, ‘hey, I don’t want people coming into my house.’ Maybe February will be better once they lift the mask mandates and all that,” Anderson said.

The inventory of detached homes on the market dropped even more precipitously than the inventory for single family homes, going from 1,278 in December on the market a year ago compared to 394 in December 2021 – a 69.2% drop.

Detached homes typically stayed on the market for 21 days in December 2021 and 26 days in December 2020.

Most homes – single family and detached – continued to sell for more than sellers listed.

Value Rising

The overall value of housing in San Diego was ranked eighth in the nation among the 50 largest metro areas by Zillow, a home listing and online sales platform.

Homes in the San Diego metro region were worth $934 million in 2021, according to Zillow.

The San Diego housing market gained $196 billion in value in 2021 and is now worth $582 billion more than it was a decade ago, Zillow reported.

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