he San Diego County median home price soared to its highest point ever, $550,000, in March, said real estate tracker CoreLogic.
Home prices increased 6.8 percent in a year, which experts attribute to a lack of homes for sale and a strong economy. The previous home peak was $545,000 in June.
The big picture: San Diego County’s median home price is technically still down from the height of the housing boom. In November 2005, the median hit $517,500, which is more than $650,000 when adjusted for inflation. The San Diego region is still a cheaper option in coastal Southern California compared to Los Angeles and Orange counties, which also hit new price peaks in March, CoreLogic reported Monday.
What is causing the price increase: A strong economy is fueling demand for homes while the number of houses available remains limited, said Chris Thornberg, economist and founding partner of Beacon Economics. There were 4,857 homes listed for sale in March, said the Greater San Diego Association of Realtors. That is 488 more than March of last year. However, those listings are down from 5,652 in March 2016, 6,101 in 2015 and 6,223 in 2014.
Are we in a housing bubble? No. Economists say today’s upswing is more sustainable, driven not by risky lending but by an improving economy, low mortgage rates and a shortage of homes for sale. Thornberg said March’s peak should not be viewed as the start of a bubble, which assumes housing prices are very overvalued.
disclaimer: for information and entertainment purposes only