San Diego Real Estate Market Update – July 2022
Monthly Reports from San Diego Association of Realtors
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Monthly Indicators
Rising inflation, soaring home prices, and increased mortgage interest rates have combined to cause a slowdown in the U.S. housing market. To help quell inflation, which reached 8.6% as of last measure in May, the Federal Reserve raised interest rates by three quarters of a percentage point in June, the largest interest rate hike since 1994. Higher prices, coupled with 30-year fixed mortgage rates approaching 6%, have exacerbated affordability challenges and rapidly cooled demand, with home sales and mortgage applications falling sharply from a year ago.
Closed Sales decreased 35.5 percent for Detached homes and 33.1 percent for Attached homes. Pending Sales decreased 39.8 percent for Detached homes and 37.0 percent for Attached homes. Inventory increased 25.0 percent for Detached homes and 6.1 percent for Attached homes.
The Median Sales Price was up 12.8 percent to $987,225 for Detached homes and 16.0 percent to $638,000 for Attached homes. Days on Market increased 17.6 percent for Detached homes but remained flat for Attached homes. Supply increased 45.5 percent for Detached homes and 20.0 percent for Attached homes.
With monthly mortgage payments up more than 50% compared to this time last year, the rising costs of homeownership have sidelined many prospective buyers. Nationally, the median sales price of existing homes recently exceeded $400,000 for the first time ever, a 15% increase from the same period a year ago, according to the National Association of REALTORS®. As existing home sales continue to soften nationwide, housing supply is slowly improving, with inventory up for the second straight month. In time, price growth is expected to moderate as supply grows; for now, however, inventory remains low, and buyers are feeling the squeeze of higher prices all around.
Housing Supply
Record-high home prices and surging mortgage interest rates are taking their toll on America’s homebuilders, with builder confidence falling for the sixth consecutive month in June and dropping to its lowest level in two years, according to the National Association of Home Builders (NAHB). Buyer traffic is down, and as construction costs increase and housing affordability declines, construction on new homes is slowing, reflecting concerns among builders about current and future sales of new single-family homes in the months ahead. For the 12-month period spanning July 2021 through June 2022, Pending Sales in the San Diego were down 14.9 percent overall. The price range with the largest gain in sales was the $5,000,001 and Above range, where they increased 29.7 percent.
The overall Median Sales Price was up 16.1 percent to $795,000. The property type with the largest price gain was the Condos – Townhomes segment, where prices increased 20.0 percent to $600,000. 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 66 days.
Market-wide, inventory levels were up 18.7 percent. The property type with the largest gain was the Single-Family Homes segment, where they increased 25.0 percent. That amounts to 1.6 months supply for Single-Family homes and 1.2 months supply for Condos.
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