San Diego Home Sales at Record Low

January tied for slowest-ever sales month in San Diego County; prices rose slightly.

San Diego County’s median home price rose slightly, 0.3 percent, in January to $802,500. There were 1,678 home sales, tying the record for the slowest sales month.

Home sales in San Diego County hit record lows in January as the median home price rose slightly.

The region had 1,678 home sales in January, said CoreLogic data released Thursday, tied for the lowest-ever sales month, last January, in records going back to 1988. At the same time, a limited supply of homes for sale has kept competition strong, resulting in rising prices.

San Diego County’s median home price was $802,500 in January, up 0.3 percent in a month. Prices are up 7 percent annually.

Mauricio Perez-Vazquez, a Chula Vista real estate agent and board member on the National Association of Hispanic Real Estate Professionals, said January is normally the slowest month and was made even worse in the current economic environment. He said many buyers have balked at higher interest rates combined with rising prices.

“Rates, with where they were at, was a tough pill to swallow” for buyers, he said.

In the last week of January, the average interest rate for a 30-year, fixed-rate mortgage was 6.69 percent, said Freddie Mac. It had risen to 6.94 percent by Thursday.

Perez-Vazquez said he’s started to see some buyers accepting higher interest rates, compared to the pre-2022 days, and thinks it’s a trend that will stick. Mortgage rates hit a high of 7.79 percent in late October, at least making some buyers feel it might be better to buy now. However, he said that same mentality doesn’t extend to potential sellers who fear a higher monthly payment if they move.

A recent Redfin study said that as of December, San Diego County that as of December, San Diego County homeowners were staying in properties an average of 15 years. That was up from a median of 7.4 years in 2005, and higher than the national median of 11.9 years. It wasn’t an isolated issue but is seen occurring nationwide.

Despite the overall trend, home listings started to slightly increase in January. There were 3,130 homes listed for sale, up from a low point of 2,988 listings in mid-December. The last time listings were similar to historical averages was summer 2022 when there were nearly 6,000 homes for sale but dropped quickly as interest rates kept increasing.

Chris Thornberg, economist and founding partner of Beacon Economics, said most homeowners couldn’t afford to sell even if they got a huge offer for their home. If they want to stay in the same area, they will have a hard time finding a place without a substantial increase in their monthly payments.

“This a function of a lack of supply, not a lack of demand,” he said. “That’s what’s going on in the market. It’s fundamentally different than 2011 (during the Great Recession) when there was no demand.”

A lack of new home construction is also a reason for slowed sales activity. There were 46 newly built homes sold last month, the lowest monthly total ever in the county. Thornberg said Gov. Gavin Newsom would end up falling considerably short of his 2017 pledge to develop 3.5 million new housing units by 2025.

Here’s how different home types fared in January:

• Resale single-family: Median of $892,000 with 1,046 sales. Down from its peak of $956,000 in August.

• Resale condo: Median of $656,000 with 539 sales, down from a peak of $680,000 in August.

• Newly built: Median of $779,000 with 46 sales. This figure combines single-family homes, townhouses and condos. It was down from a peak of $1.2 million in July, when there was an influx of newly built single-family homes, raising the median. higher.

All of Southern California has seen prices increase over the past year, with Orange County seeing the biggest rise. Here’s a look at the median prices — the point at which half the homes sold for more and half for less — across the region:

Los Angeles County: Down 2.5 percent monthly to a median of $800,000; up 4.6 percent annually.

Orange County: Monthly drop of 3.2 percent for a median of $1 million; up 12.1 percent annually

Riverside County: Flat month-over-month for a median of $550,000; rise of 2.1 percent in a year.

San Bernardino County: Down 1.3 percent monthly to a median of $475,000; up 5.6 percent annually.

San Diego County: up 0.3 percent monthly for a median of $802,500; rise of 7 percent in a year.

Ventura County: Up 1.7 percent monthly to a median of $799,000; up 8.7 annually.

Written by Phillip Molnar of the San Diego Union-Tribune.