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Home Prices Soar Past $1M

REAL ESTATE: Slow, Steady Growth Expected Through Summer

SAN DIEGO COUNTY – San Diego homeowners may be millionaires without realizing it as the median resale price for existing single-family homes topped $1 million for the third time in two years.

The Greater San Diego Association of Realtors reported that the median price of a single-family home in February was $1,043,900, a 16.1% increase from a year ago when the median price was $899,000.

The median price for attached homes – condominiums, townhomes, duplexes and other forms of attached homes – was $662,000 in February, up from $618,500 in February 2023 but well below the peak of $677,000 of August 2022.

The last time prices topped $1 million for single-family homes was in August 2023, when the median price was $,1,025,000 before going into a steady decline as interest rates rose, according to the association.

Single-family home prices also reached an even $1M in May 2022.

Spencer Lugash
President
Greater San Diego Association of Realtors

Association President Spencer Lugash said that he expects that home prices will go even higher with the arrival of the peak buying and selling period in Spring, but not as dramatically.

“I think things will still slowly increase, especially through the end of the summer, but I don’t expect to see historical growth in the sense of month-over-month like 3%,” Lugash said. “I think it will be slow and steady.”

Lugash said that declining interest rates have brought more potential buyers into the market, which in turn contributes to rising prices.

Low Inventory Pressuring Prices

As of mid-March, interest rates on 30-year fixed-rate mortgages had dropped to 6.79%, according to Freddie Mac, the Federal Home Loan Mortgage Corp.

The record high in recent history was in May 1985 when interest rates were 13.07% with the record low of 2.65% in January 2021, according to Freddie Mac.

“We’re just seeing more buyers with the rates going down, especially with rates anticipated to go down further in the summer, which everyone’s expecting,” Lugash said. “More buyers in means more competition which means higher prices.”

Putting more pressure on pricing is an exceptionally low inventory of homes on the market, which has been at or near record low levels for more than a year.

In February, there were 1,601 homes listed for sale, down 11.5% from 1,809 in February 2023, according to the association.

“It may be up, but there’s still not enough, Lugash said.

The number of attached homes for sale was improving, rising from 881 a year ago to 1,062 in February.

People who have been priced out of the for-sale market saw some relief in March with monthly rents in San Diego dropping 1.3%, according to Zumper, an apartment listing service.

The median monthly rate for a one-bedroom apartment in San Diego city proper was $2,300 in March and the median rent for a two-bedroom apartment was $3,100.

Coronado had the most expensive rents in San Diego County at $3,900 for a one-bedroom apartment and El Cajon had the lowest at $1,780 for a one-bedroom apartment, according to Zumper.

Greater San Diego Association of Realtors
FOUNDED: 1878
Headquarters: Kearny Mesa
President: Spencer Lugash
Business: real estate trade organization
Members: 2,000+
Website: www.sdar.com
Contact: 858-715-8000
Notable: The organization traces its history to 1878.

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