New Home Building in San Diego Plummets

There were 1,180 residential permits pulled in the first quarter, a drop of 58 percent compared to the same time last year, said the Real Estate Research Council of Southern California. It was the most significant drop of the seven Southern California counties.

The drop was largely the result of a reduction in the seemingly unstoppable apartment market. There were 556 multifamily permits pulled in the first quarter, a drop of 70 percent from 2018. While the apartment and condo market fluctuates heavily, because one approved project can mean hundreds of units, it was still notable because the apartment building pace had also slowed significantly at the end of last year.

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San Diego Median Home Price Back at $570k

San Diego County home sales were down for the 12th month in a row in April, said real estate tracker CoreLogic on Wednesday.

The median home price was up from previous months to $570,000, the same price it was in April 2018. In the past 12 months, the median hit a peak of $584,750 in August and a low of $532,000 in January.

There were 3,593 home sales in April, down 3.4 percent from the same time last year. Still, that’s up from the past 11 months, which have seen an average drop of 12 percent. As with Southern California as a whole, April could be a sign the housing market is gaining steam again.

CoreLogic analyst Andrew LePage wrote that a smaller decrease in sales across the region could mean that declining interest rates, and more homes on the market, motivated buyers.

“This might include people who backed out of a tighter, more frenzied market last year,” he wrote, “when rising prices and mortgage rates priced out some and made others worry about buying near a peak.”

San Diego’s market was led by resale single-family home sales, which were up 2.8 percent year-over-year and was the only type of home to see a bump. The resale median reached $630,000 — back to an all-time high reached in June and July last year.

Resale condo sales were down 3.6 percent, with a median of $420,000, down from a peak of $430,000 reached in June and July.

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San Diego home price gains lowest in nation for 4th month

San Diego metro prices gains were the lowest in the nation for fourth month in a row on the 20-city index. It was tied with Los Angeles metro, also at 1.3 percent, joining other expensive markets in substantial drops.

Analysts point to modest wage gains and prices going up too quickly as reasons why buyers are staying out of the market. Nationwide price gains were still nearly double the rate of inflation at 3.7 percent, although that is down from 6.5 percent at the same time last year.

“Given the broader economic picture, housing should be doing better,” wrote David Blitzer, managing director of the index. “Mortgage rates are at 4 percent for a 30-year fixed rate loan, unemployment is close to a 50-year low, (there is) low inflation and moderate increases in real incomes would be expected to support a strong housing market.”

The last time home price increases in San Diego metro were as slow was summer 2012. Yet prices are still going up, unlike the Great Recession when prices were down annually by double digits. In October 2008, home prices were down 26.67 percent year-over-year.

Lower cost markets across the United States saw the biggest gains in March. Prices were up 8.2 percent in the Las Vegas metropolitan area, 6.1 percent in Phoenix, 5.3 percent in Tampa and 4.7 percent in Atlanta.

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