Home prices in San Diego County, still far from their pre-recession peaks, have risen to their highest level in four years, Tuesday’s DataQuick report shows. Home sales, which went through a five-month positive streak, have dropped.
The median price for all homes sold in July was $342,000. That’s the highest it’s been since August 2008, when the economy was in the dumps and the local median price was $350,000. The county peaked at $517,500 in November 2005.
July’s median price increased 1.9 percent from $335,500 recorded in June, and up 5.2 percent from the same time last year. Price boosts were most evident among condo resales. All five regions of the county saw price increases from a year ago. The hottest area was central San Diego, where the median price rose from $226,750 to $267,000, nearly 18 percent.
The county recorded 3,565 sales in July, marking the first sales drop in five months. Transactions fell 5.1 percent from June, but they’re 17.2 percent higher than a year ago.
DataQuick analysts said home values in Southern California as a whole came close to a four-year high due to “increased activity in move-up and high-end submarkets.” Evidence of that has been appearing in San Diego County this year.
Why are prices rising?
“Greater demand, partially triggered by historically low mortgage rates, and a thinner inventory of homes for sale help explain recent gains in the median price,” the DataQuick report said.
Mortgage rates, which inched up last week, are still near historic lows. The 30-year fixed rate is 3.59 percent, while the 15-year fixed is 2.84 percent.
Meanwhile, inventory in San Diego County remains lower than normal. There were 6,006 active listings in July. That’s the lowest level in at least three years, based on a snapshot from the San Diego Association of Realtors. (Note: The trade group began tracking listing figures long before that, but it began splitting active and contingent listings in June 2009 to get a sense of the number of short sales in progress.)
Another factor that continues to play a role in rising home prices is a drop in distressed sales, which include both short sales and foreclosure resales, DataQuick says. Together, they comprised 39.7 percent of July’s resale transactions, the lowest level since January 2008, when that number was 36 percent. This housing category is important because distressed properties are typically priced lower.
“Even adjusting for changes in market mix, there’s growing evidence prices have crept up in areas where more demand has met a shrinking number of homes for sale,” said John Walsh, DataQuick president, in this month’s report.
“But we’re approaching the peak of the traditional spring-summer home-buying season,” he added. “Whether these trends hold into the fall and winter isn’t clear.
“If they do, then logically the number of homes on the market would eventually rise to meet the demand. More owners will be interested in selling, knowing their homes are likely to fetch a higher price, and more people will shift from a negative to at least a slightly positive equity position, enabling them to sell.”
Written by
Lily Leung
