San Diego home sales recently dropped to their lowest level in years, likely much more to do with affordability constraints than the economy, but it might be a sign of things to come.
In June there were 3,927 home sales in the county, CoreLogic said, which is the lowest in four years. However, all drivers of the real estate market are good — job growth, low unemployment, rising wages — and June’s median home price hit its highest point ever.
The phenomenon is nationwide, largely led by a shortage of homes for sale, said Alan Gin, economist at University of San Diego. A lack of homebuilding during the Great Recession meant there wasn’t much inventory available for the growing population once the economy improved.
“That was a period where construction really dried up and I think we are still seeing the impact of that,” Gin said. “There wasn’t construction back then and the result is fewer homes.”
In San Diego County, 18,031 residential building permits were issued in 2003 but those dropped to less than 3,000 in 2009 during the recession.
Gin said a lack of sales has a ripple effect across the real estate job market, even if it has little to do with the overall health of the economy. He said everyone along the job chain, from real estate agents to title agents, could be affected.
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