San Diego Home Prices Reach Record High, Surpassing $1 Million Mark

San Diego home prices have hit a new milestone, reaching a record high median price of $1,001,500 for resale single-family homes in May, according to CoreLogic. This surge in prices is attributed to limited inventory and strong competition in the market.

Real estate analyst Mark Goldman stated that the $1 million mark was inevitable and predicts that prices will continue to rise. With more buyers than sellers in the market, the price of homes is expected to keep increasing. Low mortgage rates have also contributed to a lack of inventory, as homeowners are less likely to move and take on a new mortgage at higher rates.

The housing market in San Diego County is dominated by resale single-family homes, which accounted for over 60 percent of home sales in May. New home construction has had little impact on the market, with only 1,225 single-family homes built in the county last year.

As prices continue to rise, the market is beginning to resemble the competitive environment of a few years ago, with multiple offers on properties. Real estate agent Mauricio Perez-Vazquez shared that a single-family home he listed in south San Diego received four offers above asking price within a week.

The average interest rate for a 30-year, fixed-rate mortgage was 7.17 percent at the end of May, significantly higher than the 3.13 percent average rate in May 2021. This increase in interest rates has led to a decrease in home sales, with May 2022 seeing the second-lowest number of sales for that month in over three decades.

While San Diego County has seen a significant increase in home prices, other Southern California markets have also experienced price hikes. Orange County, for example, has a median home price of $1.2 million, up 20 percent annually. Despite monthly fluctuations, all Southern California markets have seen price increases year-over-year.

Overall, the housing market in San Diego County is facing challenges due to limited inventory and high demand, leading to record-high prices for single-family homes. Experts predict that prices will continue to rise as long as the imbalance between buyers and sellers persists.