Category Archives: Real Estate

San Diego mid-year housing report: Fewer listings, rising prices

sd home price

For the first time in years, the San Diego County housing market is starting to cool.

In the initial six months of 2019, sales were down 8.4 percent from the same time last year. This meant homes stayed on the market longer and there were more options for potential homebuyers.

Even knowing that, there are two things that are confusing to analysts and possibly for the frustrated San Diegan trying to make heads or tails of what is going on.

  • Prices are still going up. In June, prices rose 2.6 percent year over year. If sales are down, how is that possible? Most real estate economists and real estate agents have said prices rose so quickly in recent years that the median home price is far out of reach for many potential buyers. However, San Diego County still has a very small number of homes for sale each month compared to the rest of the nation. That means there is still a lot of competition for what is left, even if fewer people are competing, and that pushes prices up.
  • All indicators show the home market should be on fire, but it’s not. The San Diego County unemployment rate was near a record low for most of the first six months, and the region had been adding the most positions in the higher paying professional and business services category. Also, the stock market is still showing gains and mortgage interest rates are much lower than they were a year ago.

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San Diego home price gains LAG behind nation

The increase was the third-worst performing in the 20-city index and behind the nationwide average gain of 3.4 percent. It represents a continuing reversal for America’s Finest City, which had been experiencing annual home price increases of 7.3 percent at the same time last year — and was one of the top-gaining metro areas in the nation.

On the plus side for homeowners, San Diego metro’s home prices are still increasing and it is no longer the worst-performing metro in the closely-watched index. Seattle home prices were down 1.2 percent annually and San Francisco had a 1 percent increase, the lowest in California.

San Diego metro’s fate fits into a national trend of slowing price appreciation, especially for the most expensive markets. Analysts point to years of rising prices outpacing wages as a reason why the home market has cooled, even in spite of lower mortgage interest rates and near-record low unemployment.

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Foreign buyers flee the US housing market

Top states for foreign purchases were Florida, California and Texas

China’s currency controls, as well as international tensions between the U.S. and a slew of countries traditionally thought of as our allies, are putting a crimp on America’s real estate market by thwarting demand from foreign homebuyers.

Purchases by Chinese people, the biggest share of foreign buyers, plummeted 56% in the 12 months ended in March, while British home purchases tumbled 48%, according to a report from the National Association of Realtors. Chinese people bought $13.4 billion of American homes during the 12 months ended in March, compared with $30.4 billion a year earlier.

Canadians, the next-largest group of foreign buyers, purchased $8 billion of homes, compared with $10.5 billion a year earlier. Buyers from India were No. 3, with $6.9 billion of purchases, down from $7.2 billion. The U.K. was No. 4, but saw the second-biggest decline: Brits purchased $3.8 billion of homes, down from $7.3 billion a year earlier. Mexico was No. 5, at $2.3 billion, a decline of 45% from $4.2 billion a year earlier.

Measuring all foreign purchases, the total dollar volume plummeted 36% to $77.9 billion, according to the report. Foreign buyers paid a median price of $280,600, about 8% higher than the median for all existing homebuyers.

The rankings of the states that got the biggest share of foreign purchases remained the same as in past years: Florida was first, followed by California, Texas, Arizona and New Jersey.

Other tidbits from the report include: 41% of foreign buyers paid all-cash, compared with about 20% for the overall market. Also, 76% of foreigners purchased a single-family home or townhome, and 44% purchased a property in a suburban area.

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