San Diego Real Estate Market Update – October 2022
Food for Thought: ‘The number one front door color that buyers will pay more for is black. A black door with a shiny finish may sell for up to $6,500 more than a similar house with a different colored door. It is also the top searched front door color,’ says Kerry Sherin, consumer advocate at home valuation company, Ownerly.
Source: HomesandGardens.com
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Monthly Indicators
The U.S. real estate market continues to slow as we move into fall, as rising consumer prices and higher mortgage interest rates squeeze homebuyer budgets and cool activity. With inflation showing little sign of abating, the Federal Reserve implemented another 75-basis-point hike in September, marking the third such rate increase this year. The cost of borrowing has reached multi-year highs on everything from credit cards to auto loans in 2022 as mortgage interest rates topped 6% for the first time since 2008, causing existing home sales to decline for the seventh consecutive month.
Affordability challenges have priced many buyers out of the market this year, and buyers who do succeed in purchasing a home are finding that the costs of homeownership have increased significantly, with monthly mortgage payments more than 55% higher than a year ago, according to the National Association of REALTORS®. Inventory remains lower than normal, and as the market continue to shift, experts project homes will begin to spend more days on market and price growth will slow in the months ahead.
Closed Sales decreased 36.1 percent for Detached homes and 39.0 percent for Attached homes. Pending Sales decreased 37.3 percent for Detached homes and 40.5 percent for Attached homes. Inventory increased 29.3 percent for Detached homes and 33.1 percent for Attached homes.
The Median Sales Price was up 7.2 percent to $915,000 for Detached homes and 6.2 percent to $600,000 for Attached homes. Days on Market increased 52.4 percent for Detached homes and 45.0 percent for Attached homes. Supply increased 63.6 percent for Detached homes and 75.0 percent for Attached homes.
Housing Supply
Builder confidence declined for the ninth consecutive month in September, as high home prices, rising interest rates, and elevated building costs continue to impact affordability, reducing buyer traffic and hindering new home sales, according to the National Association of Home Builders (NAHB) / Wells Fargo Housing Market Index (HMI). The NAHB reports builder confidence dropped 3 points to 46 in September; by contrast, the index stood at 83 in January, when interest rates were half of what they are now. For the 12-month period spanning October 2021 through September 2022, Pending Sales in the San Diego were down 22.1 percent overall. The price range with the largest gain in sales was the $5,000,001 and Above range, where they increased 18.4 percent.
The overall Median Sales Price was up 13.9 percent to $810,000. The property type with the largest price gain was the Condos – Townhomes segment, where prices increased 18.1 percent to $620,000. The price range that tended to sell the quickest was the $750,001 to $1,000,000 range at 20 days; the price range that tended to sell the slowest was the $5,000,001 and Above range at 62 days.
Market-wide, inventory levels were up 30.5 percent. The property type with the largest gain was the Condos – Townhomes segment, where they increased 33.1 percent. That amounts to 1.8 months supply for Single-Family homes and 1.4 months supply for Condos.
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