San Diego: Low Mortgage Rates and Inventory Boost Sale Prices, Year Over Year
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For the last few months, the S&P/Case-Shiller home price index has showed moderate home-price gains in San Diego. But a recent report shows even stronger gains for the metro area.
DataQuick, the San Diego-based analytics firm, published data on Friday that shows a double-digit gain in the median sale price for this area.
According to the report, the median sale price for the San Diego real estate market rose by 11.1% over the last year or so. The comparison period ran from September 2011 to September 2012.
During that 12-month period, the median sale price in San Diego County rose from $315,000 to $350,000, or 11.1%.
Home sales also rose during this period, although more moderately. In September 2011, there were 3,084 sales recorded in the metro area. In September of this year, 3,214 sales were recorded, for a gain of 4.2%.
Most Expensive Markets in San Diego
Like all metro areas in California, the San Diego housing market covers a broad pricing spectrum. Some cities and towns are much more expensive than others. Here are the most expensive zip codes around the county.
Notes: The following list is based on the median sale price for new and existing homes and condos, during the month of September 2012.
- Central San Diego — With a median sale price of $1,105,000, Coronado (92118) is the most expensive housing market in central S.D. Condo prices are particularly strong in Coronado. The median sale price for resale condominiums rose by 44% over the last year or so. Single-family home prices are softer by comparison, with a slight drop in the median price.
- East County — In the east, Jamul (91935) takes the prize for most expensive real estate market. In September, the median sale price in Jamul was $469,000, a slight decline over last year.
- North County Inland — With a median sale price of $1,912,500, Rancho Santa Fe (92067) is by far the priciest zip code in this part of the county. In fact, no other median price in the region came close.
- North County Coastal — It’s probably no surprise that Del Mar (92014) topped the list for sale price. The median sale price last month was $1,554,500. Prices in this market appear particularly strong, which is largely the result of limited inventory and strong demand. The median sale price for all homes and condos in Del Mar rose by 77% over the last year or so. Of course, that figure is based on limited data (only 17 home sales were recorded during the month of September).
- South County — In the southern part of San Diego County, Bonita (91902) was the most expensive housing market. Bonita had a median sale price of $475,000 last month, an increase of 13.8% over the same time last month.
Low Rates and Job Growth Will Increase Housing Demand
We’ve had low mortgage rates for months, and they remain at record lows today. Last week, the average rate for a 30-year fixed mortgage was 3.39%. That was the second lowest average in the 41-year history of Freddie Mac’s weekly market survey.
In the past, low rates alone have not been enough to spur the housing market. But they are now starting to overlap another trend in the San Diego area — job growth.
From August 2011 to August of this year, San Diego’s unemployment rate fell from 10.3% to 9%. Granted, 9% unemployment is nothing to brag about. But considering the city’s unemployment peaked at nearly 11% in January 2010, it’s clearly an improvement. Slowly but surely, the job market is improving across the county.
According to California’s Employment Development Department, most sectors gained jobs from July to August (the more recent numbers are forthcoming). The transportation and utility sector gained 1,300 jobs during that period, while leisure and hospitality added another 1,200.
Mortgage rates are expected to remain low into the first part of 2013, at least. If the local economy continues to stabilize at the same time, we will likely see a rise in housing demand in most parts of the county.
At the same time, housing inventory appears to be falling in many cities within San Diego County. Statewide, the number of homes for sale in the $313,000-and-below price range dropped by 40% over the last year, according to Zillow.
A combination of low mortgage rates, shrinking supply, and moderate economic improvements will likely boost home prices in San Diego, into the first half of 2013. Zillow’s economists have predicted a 1.6% increase in home values for San Diego, between now and June 2013.
Disclaimer: This story contains predictions and projections relating to the San Diego real estate market, home prices and mortgage rates. This information has been provided for educational purposes and does not constitute financial advice. We make no guarantees or assertions about the future of this housing market. We encourage consumers to conduct extensive research before investing in a home.