Status of the San Diego Real Estate Market in 2017
San Diego ranks as one of the hottest real estate markets in the country. A report by the Greater San Diego Association of Realtors lists the average time a home spends on the market to be only thirty days, four days less than in 2016. Home values keep going up, with the median sale price increasing 4.4% in a year according to a CoreLogic survey of the San Diego market, the fourth highest in Southern California. An S&P Case-Shiller Indices report noted that in September 2017, San Diego had the third highest home price growth in the nation, and that also accounts for repeat sales.
CoreLogic states the growth is due to low home inventory and strong job growth, but the downside is that, like many other markets, first time home buyers are struggling to find affordable homes. Inventory remains low, while demand is higher than ever. Another factor is the amount of homes going to so-called “absentee buyers”, with speculators buying homes they don’t intend to live in. CoreLogic puts the rate of absentee buyers at a large 21.4%, a significant year-over-year growth from 19.9% in 2016, but down significantly from the 30% in 2013.
Demographics in San Diego
While San Diego ranks as one of the youngest working U.S cities, with a huge 31.6% of the population from the 18-34 demo according to a JLL Research survey (us.jll.com), they’re still not making as big of an impact on the real estate market as one might think due to high prices. While they’re attracted by the strong job market and hip locale, an Apartment List Rentonomics survey suggests they’re not settling there due to the high prices, although the millennial home ownership rate is still higher than in Los Angeles. However, as baby boomers start to retire and downsize, this trend is expected to shift, with many predicting this confluence of retirees and millennials will help stabilize the market.
Average prices of housing in the San Diego Real Estate Market
According to CoreLogic, the median price for a home in October reached $529,750, a slight dip from just a few months previous, when the median price hit an all time high of $545,000. Average rent for hovered around $1,748 a month according to a MarketPointe Realty Advisors report, an 8% increase in one year.
Reasons for growth and outlook for 2019
The market looks to remain strong in the year ahead, with home prices expected to rise throughout the year. The California Association of Realtors expects the median sale price to go up 4.2% over the course of the year, along with only a modest increase in mortgage interest rates. Meanwhile, residential construction for single-family homes has fallen behind, with multifamily home starts for the rental market still dominating according to California Real Estate school First Tuesday.