San Diego Real Estate Market Update – May 2022
Monthly Reports from San Diego Association of Realtors
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Monthly Indicators
The average 30-year fixed rate mortgage exceeded 5% in April, the highest level since 2011, according to Freddie Mac. The recent surge in mortgage rates has reduced the pool of eligible buyers and has caused mortgage applications to decline, with a significant impact on refinance applications, which are down more than 70% compared to this time last year. As the rising costs of homeownership force many Americans to adjust their budgets, an increasing number of buyers are hoping to help offset the costs by moving from bigger, more expensive cities to smaller areas that offer a more affordable cost of living.
Closed Sales decreased 17.9 percent for Detached homes and 27.1 percent for Attached homes. Pending Sales decreased 18.9 percent for Detached homes and 18.7 percent for Attached homes. Inventory decreased 16.5 percent for Detached homes and 36.4 percent for Attached homes.
The Median Sales Price was up 19.3 percent to $1,000,000 for Detached homes and 24.6 percent to $660,500 for Attached homes. Days on Market decreased 5.0 percent for Detached homes and 20.0 percent for Attached homes. Supply decreased 10.0 percent for Detached homes and 33.3 percent for Attached homes.
Affordability challenges are limiting buying activity, and early signs suggest competition for homes may be cooling somewhat. Nationally, existing home sales are down 2.7% as of last measure, while pending sales dropped 1.2%, marking 5 straight months of under contract declines, according to the National Association of REALTORS®. Inventory remains low, with only 2 months supply at present, and home prices continue to rise, with the median existing home at $373,500, a 15% increase from this time last year. Homes are still selling quickly, however, and multiple offers are common in many markets.
Housing Supply
The share of Americans planning to purchase a home in the next year is falling, according to NAHB’s Housing Trends Report, with only 13% of adults intending to purchase a home in the next 12 months, the lowest level since mid-2020. Declining affordability and low inventory have made it difficult for many buyers to compete in the current market, as rising inflation, surging interest rates, and record high sales prices have priced an increasing number of prospective buyers out of the market. For the 12- month period spanning May 2021 through April 2022, Pending Sales in the San Diego were down 7.1 percent overall. The price range with the largest gain in sales was the $5,000,001 and Above range, where they increased 64.0 percent.
The overall Median Sales Price was up 18.1 percent to $777,000. The property type with the largest price gain was the Condos – Townhomes segment, where prices increased 19.6 percent to $580,000. The price range that tended to sell the quickest was the $750,001 to $1,000,000 range at 18 days; the price range that tended to sell the slowest was the $5,000,001 and Above range at 72 days.
Market-wide, inventory levels were down 23.3 percent. The property type with the smallest decline was the Single-Family Homes segment, where they decreased 16.5 percent. That amounts to 0.9 months supply for Single-Family homes and 0.6 months supply for Condos.
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