San Diego’s housing market is going crazy after a slow April and slightly improved May.
Agents report homes are selling nearly as fast as they can list them, with multiple offers common.
Zillow, an online listing agency and brokerage, reported that San Diego homes on average lasted 12 days on the market in mid-July before a contract to sell was signed- 14 days faster than a year ago.
“The current housing market in San Diego is a perfect storm for a sizzling hot market,” said Jamie Duran, president of Coldwell Banker Southern California.
“We’re experiencing historic low interest rates and historic low inventory, which is driving prices and demand up. This pent up demand has helped deliver some recent record San Diego sales beating the highs set in June 2015,” Duran said.
Homes haven’t been snatched up this fast since 2013, and the number of homes on the market hasn’t been this low since 2012, Duran said.
“Combine this with historic low rates and we get one of the strongest real estate markets in years,” Duran said.
Wendy Purvey, COO of Pacific Sotheby’s International Realty, reported that “our agents are incredibly busy right now.”
“When we went into COVID, we were probably having one of the best real estate markets in California history,” Purvey said, adding that that vitality is returning after stalling at the start of the pandemic.
“We’re getting more and more listings coming into the market,” Purvey said. “There was a period of time when there was absolutely nothing anybody could do. We went through three weeks where that was a concern.”
Like other agents, Purvey cited low interest rates among the drivers of the market’s resurgence.
Freddie Mac in mid-July released a survey showing that the 30-year fixed-rate mortgage nationally averaged 2.98 %, the lowest rate in the survey’s history dating back to 1971.
A year ago, the average interest rate for a 30-year mortgage was 3.8%, according to Freddie Mac.
In San Diego County, some real estate agents reported that their clients got rates of less than 2.8 percent.
Fast and Furious
Carla Farley, owner of Corban Realty Group in Lomita and president of the Greater San Diego Association of Realtors, said so many offers are coming in so fast that some sellers are limiting the number of showings.
“They just can’t take it anymore,” Farley said.
Farley said she recently went to view a Bonita home that was on the market for $599,000 and people were lining up to see it.
Condominiums are getting multiple offers, Farley said.
On the luxury side, Jason Barry of Barry Estates and Jason Barry Team in Rancho Santa Fe said the pandemic has shifted the market by attracting people from outside of San Diego County.
Barry said that since the pandemic started, about half of his agency’s sales have come from people moving to San Diego County. He said that before the pandemic, most of his sales were to people already living in the county.
“That has been the dramatic change that we’ve seen in terms of demand,” Barry said. “It seems as if San Diego has always been kind of quiet on the luxury end for people outside of San Diego. Now it feels like with what’s been going on, we’re definitely a hot topic with people.”
Part of it is that COVID-19 case numbers are lower here than in some other areas of the country and buyers see San Diego as a safer place to live, Barry said.
The luxury real estate market was a little soft early on, but Barry said it’s turned around.
“I’ve never seen it this active and I’ve been full-time since ’94,” Barry said.
Mary Lee Blaylock, president and CEO of Berkshire Hathaway Home Sevices California, said the housing market “has bounced back with vigor.”
“Initially there was talk of a U-shaped return but the reality is a solid V-shape return with more demand than product,” Blaylock said. “We believe that the pent up demand is showing itself and that it is a very fast paced market. Multiple offers on homes in all price points is not uncommon. The buyers that are looking are serious and the sellers that are selling are serious.”
Blaylock said the pool of buyers for homes in the $700,000 to $1.2 million “is vast.”
There’s also no shortage of buyers for higher-priced homes, Blaylock said, adding that “We have seen 16 homes with a sales price over $5 million sell in the first 20 days of July alone.”
At the same, inventory was 33.5% lower than in July 2019, Zillow reported.
The downside to the hot market is that rising prices put homes out of reach for some, creating what Duran of Coldwell Banker called “a reality check and balancing act matching seller pricing and buying power in the market.”
The Greater San Diego Association of Realtors pegged the median price of single family homes in San Diego County as of mid-July at $687,000 – up from $655,000 in July 2019.
The median price for condominiums and townhomes in mid-July was $453,000 compared to $435,000 in July 2019, according to the association.
Yvonne Cromer, a real estate agent with Compass and a board member of the Pacific Southwest Association of Realtors, compared what’s happening during the pandemic to the period after the 9/11 terrorist attacks.
“When this first hit, we did feel a little bit of a slowdown, a lot of uncertainty for about two weeks,” Cromer said. “It was a very similar feeling, that same pause and regroup. Then when everybody regrouped, it was bigger and stronger, faster than it’s ever been.”
A challenge in a hot market is “You have to show and write a lot of offers because you’re up against a lot of competition,” Cromer said.
Ramon Maldonado of Compass in La Jolla said he’s seeing more out-of-town buyers of late, particularly from Los Angeles and San Francisco.
With more people working remotely from home, people are moving to San Diego from cities where housing is more expensive, Maldonado said.
Angel Avilez, vice president of Century 21 Award for Southern California based in Mission Valley, described the San Diego housing market as “incredibly hot.”
“It is definitely a time when buyers are coming out of the woodwork,” Avilez said, adding that “buyers have to be aggressive” in what they offer.
Sellers are in a very good position right now. Buyers have to be aggressive in the way “This is like peak market activity, low inventory,” Avilez said. She had 35 people looking at one house and 12 of them made offers.
Some buyers are even making offers without requiring formal property appraisals or termite treatment, Avilez said.
“Everything is flying off the shelves fright now,” said Miguel Diaz of Douglas Elliman Real Estate in Mission Valley.
“You’re finding any property that’s nice is gone in two days,” Diaz said. “It’s like the gates were opened. There was pent-up demand and people were ready to get out there.”
Diaz said he sees no signs of the market cooling off.
“This is going to go through summer because of the fact that there are so many buyers out there and there is no supply,” Diaz said. “This could absolutely go through the end of the year, as long as we don’t get shut down where we can’t show property.”
Linda Moore, a Realtor with Coldwell Banker Residential Brokerage in Encinitas, said that the pandemic has made people take a hard look at where they live and what they see isn’t what they want.
Space for home offices have suddenly become a much higher priority.
“Homes, in my opinion, are more important than ever to people,” Moore said. “They want homes that are comfortable.