Home Prices Top $1 Million

San Diego single-family home prices set a record in August, according to the Greater San Diego Association of Realtors, topping $1 million.

Driving the price surge is a continued shortage of homes for sale as people stay put in the face of rising interest rates.

Association President Frank Powell said that he’s reluctant to speculate where the market is headed because he thought that prices would soften as interest rates rose.

“I thought it was going to fall and all of a sudden, it’s up to a million. I was shocked,” Powell said. “So much for the housing market crashing. We’re just not going to see a crash. A crash happens when people can’t afford their mortgage, that’s a crash. The economy is still doing good, jobs are still there, supply is down, demand is still up.”

Now, he said his best guess is that the market will remain pretty much where it is through the end of the year.

“Nobody knows what the market is going to do in the future,” Powell said.

The median price of a single-family home in August was $1.025 million, compared to $903,000 in August 2022, according to the Greater San Diego Association of Realtors.

Statewide, the California Association of Realtors reported that the median price of single-family homes in August was $859,800, up 3% from a year ago.

The most expensive single-family home sold in San Diego County in August, according to the Greater San Diego Association of Realtors, was Crescent House on Neptune Avenue in Encinitas that went for $16.25 million.

Designed by Wallace E. Cunningham, the 6,300-square-foot oceanfront property has five bedrooms and six bathrooms and was the setting for HBO’s “Westworld.”

Staying Put

The median price of condominiums and townhomes in San Diego County was $677,000 in August, up from $622,000 a year ago, according to the Association of Realtors.

Inventory remained at rock bottom in August with 1,432 new single-family home listings, a drop of 34.2% from a year ago when 2,177 homes were up for sale.

Statewide, active listings have fallen for the past five months in a row, according to the California Association of Realtors.

“Relatively speaking, not a lot of people are moving,” Powell said.

With interest rates topping 7%, it just doesn’t make sense for many people who are sitting on mortgages they got a few years ago at 3% to sell, then buy a new home at the higher rate.

“I’m not going to do that. It was almost free money,” Powell said. “Interest rates have to drop to 5.5%. Then you’ll see everyone get excited and say, ‘Hey, let’s sell our house and get another one.’”

Higher Than Market Prices

For those who do put their homes on the market, Powell said that they should have little trouble finding eager buyers.

“If you price it right, then you will get multiple offers and probably still receive a higher than market price,” Powell said. “That’s exactly how it (the median price) got about $1 million.”