San Diego Real Estate Market Update – June 2022
Monthly Reports from San Diego Association of Realtors
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Monthly Indicators
After two years of record-setting activity, there are signs the housing market might be cooling. High home prices and a surge in mortgage interest rates are slowing buyer activity, with home sales declining for the third consecutive month under the weight of soaring homeownership costs. The National Association of REALTORS® (NAR) reports existing home sales were down 2.4% from the previous month, while pending sales fell 3.9% as of last measure, extending the trend of recent months. Economists predict sales will continue to soften in the near future, which may put downward pressure on home prices.
Closed Sales decreased 18.4 percent for Detached homes and 14.4 percent for Attached homes. Pending Sales decreased 22.8 percent for Detached homes and 19.6 percent for Attached homes. Inventory decreased 2.0 percent for Detached homes and 22.3 percent for Attached homes.
The Median Sales Price was up 15.1 percent to $990,000 for Detached homes and 24.1 percent to $670,000 for Attached homes. Days on Market decreased 5.0 percent for Detached homes and 11.1 percent for Attached homes. Supply increased 20.0 percent for Detached homes but increased 10.0 percent for Attached homes.
The slowdown in sales has provided a much-needed lift to housing supply, with inventory up 10.8% from the previous month according to NAR, although supply remains down 10.4% compared to this time last year, with only 2.2 months’ supply of homes at the current sales pace. As the nation continues to explore ways to solve the ongoing housing shortage, estimated at 5.5 million homes, the Biden administration recently unveiled the Housing Supply Action Plan, which aims to expand housing access through a number of administrative and legislative actions and help relieve the nation’s housing crisis over the next 5 years.
Housing Supply
A spike in mortgage rates, increased building costs, and record-setting new home prices continue to take their toll on the construction industry, as new single-family home sales plunged 16.6% month-over-month, according to recent data from the Commerce Department. With the median price of a newly built home a record $450,600 (nationally) as of last measure, declining affordability continues to hamper demand, as mortgage applications for new home purchases fell 10.6% compared to a year ago, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS). For the 12-month period spanning June 2021 through May 2022, Pending Sales in the San Diego were down 10.8 percent overall. The price range with the largest gain in sales was the $5,000,001 and Above range, where they increased 46.6 percent.
The overall Median Sales Price was up 17.2 percent to $785,000 for San Diego County. The property type with the largest price gain was the Condos – Townhomes segment, where prices increased 19.9 percent to $590,000. 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 68 days.
Market-wide, inventory levels were down 9.1 percent. The property type with the smallest decline was the Single-Family Homes segment, where they remained flat. That amounts to 1.2 months supply for Single-Family homes and 0.9 months supply for Condos.
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