San Diego County home sales plummet to level not seen in nearly 30 years

Housing sales in San Diego County had their biggest annual drop in nearly 30 years in May as the COVID-19 coronavirus brought the market to a crawl.

There were 2,327 home sales in May, down more than 40 percent from the same period the previous year, according to CoreLogic data provided by DQNews. Analysts pointed to a lack of consumer confidence and sellers pulling homes off the market to wait out for a better selling time.

The decline represents the biggest annual drop in home sales since January 1991, when sales were down by 41.5 percent.

Despite few sales, home prices were largely unchanged. The median price of $590,000 was down about $4,000 from last month but still up 3.5 percent in a year. The home inventory decline resulted in bidding wars for a limited number of properties and pushed prices up, or at least meant almost no price reductions.

Mark Goldman, a real estate analyst with C2 Financial Corp., said there’s a host of reasons that sellers take homes off the market, such as the concern of people spreading COVID-19 at home showings, the concern that they won’t get a good price during heavy job losses and difficulty meeting cleaning requirements for home showings.

“There’s a lot of uncertainty,” Goldman said. “People aren’t sure where they are going to go, what’s going to happen to their income, not sure what is going to happen with home prices.”

Goldman said it is still a seller’s market and that potential buyers need to mentally prepare themselves for price wars. He said he doesn’t see the median home price dropping much in the coming year and that a wave of foreclosures is unlikely because San Diegans could just sell and likely get a good price.

Around 5,200 homes were listed for sale in San Diego County in May, according to the Redfin data center, down from roughly 7,370 at the same time in 2019 and 6,780 in 2018.

The tight inventory has made the process of showing homes difficult for motivated buyers, said Samantha O’Brien, a real estate agent with PorchLight. She said buyers keep contacting her with properties they find online and she will call the seller’s agent only to find out they have already accepted an offer, or they will get quickly outbid.

O’Brien said a lot of her buyers are attracted by low interest rates and have put a new importance on owning because many are working from home. She said it has been hard to communicate to sellers that they might want to consider putting homes on the market.

“Sellers are thinking no one is buying because of the coronavirus,” she said. “They think people are just staying in their homes and not spending money when, in actuality, people are.”

Interest rates are still at historic lows. The rate for a 30-year fixed-rate mortgage in May was 3.23 percent, according to Freddie Mac, down from 4.07 percent at the same time last year.

Here’s how the median price fared by type:

• Resale single-family: Median of $650,000, down $250 from an all-time peak reached the previous month. There were 1,435 sales, the lowest since January 2019, typically the slowest month of the year.
• Resale condominium: Median of $430,000, down from an all-time peak of $453,250 in March. There were 623 sales, also the lowest since January 2019.
• Newly built: Median of $681,750, down from the peak of $812,500 reached in October 2018. There were 269 sales, typical for newly built homes. ◆