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San Diego County median home price hits record $680,000

La Jolla home
(File)

Tight inventory continues to keep prices at record highs.

San Diego County’s median home price continued its historic rise in March, reaching a record high of $680,000.

The median price — which includes new and resale homes — has increased 15.3 percent in a year, according to CoreLogic data provided by DQNews. The county was not alone, with new peaks being reached across Southern California and much of the nation in the same time period.

Analysts say the factors driving the increase include a lack of homes for sale mixed with high demand, continued low mortgage rates and improved finances of many stay-at-home workers during the pandemic.

The homebuying frenzy, which began with the arrival of COVID-19 in March last year, has been going for a year. Few see reasons why it would slow anytime soon. While the price gain has been substantial, it doesn’t match the housing boom of summer 2004. when prices were increasing around 27 percent annually.

There were 3,395 active listings in San Diego County from March 1 to March 28, according to the Redfin Data Center. That compares with 5,952 around the same time last year; 7,902 in 2019; 6,771 in 2018 and 6,436 in 2017.

The limited inventory means real estate agents are trying to get creative, sending fliers to homeowners to try to get them to sell or even going door to door.

Real estate agents were hoping that increasing vaccinations for COVID-19 meant more people would be comfortable putting their homes on the market — but that hasn’t happened. Another factor that could slow sales is rising interest rates, but that also seems to have made little difference yet.

Mortgage rates remained low in March, albeit a little higher. The interest rate for a 30-year fixed-rate mortgage was 3.08 percent, according to Freddie Mac, down from 3.45 percent a year earlier. The rate is up from December’s average of 2.68 percent, which was the lowest in records going back to 1971.

Mark Goldman, a real estate analyst with C2 Financial Corp., said he expects the mortgage rate to be around 3.5 percent by the end of the year. He said he doesn’t see it making a big difference in the market because demand would still be very high.

“Typically when rates are increasing, it motivates [potential buyers] on the sidelines that were waiting for a better deal,” he said.

Locking in a lower rate might benefit a buyer, Goldman said, even if the appraisal is under what they paid for a home. The thinking is prices will continue to rise and it shouldn’t take much time for the appraisal to catch up.

He said rates in the 4 percent range for a long time might slow the market’s momentum, but he doesn’t think prices would go down — only slow their appreciation.

Now more than ever, buyers (and often sellers) want a speedy escrow closing.

Here’s how prices fared by different home type:

• Resale single-family: New record median of $760,000, up $20,000 from the previous record in February. There were 2,462 sales.
• Resale condominium: Median of $500,000, down $5,000 from the peak reached in February. There were 1,290 sales.
• Newly built: Median of $734,750, with 360 sales. The median includes new single-family homes and condos. Its record was $812,500 in October 2018, when there was an increase in luxury single-family homes for sale.

Median home prices were up 14.5 percent for the year across the six-county Southern California region. The biggest increase was in San Bernardino County at 18.3 percent for a median of $429,500.

It was followed by Riverside County at 17.9 percent for a median of $476,750; Los Angeles County at 17.2 percent for a median of $750,000; San Diego County with its 15.3 percent increase; Ventura County at 12.5 percent for a median of $658,000; and Orange County at 10.6 percent for a median of $835,000. ◆