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San Diego home price down annually for first time in 7 years

San Diego Union Tribune logo San Diego Union Tribune 9/25/2019 By Phillip Molnar, The San Diego Union-Tribune

San Diego County’s median home price in August was down annually for the first time in seven years, albeit a small reduction, real estate tracker CoreLogic said Wednesday.

The median price of $584,000 was down 0.1 percent from the same time last year at $584,500. The last time prices were down year-over-year was March 2012.

On the flip side, there were signs the housing market was picking up in August. There were 3,835 home sales, up 1.9 percent from the same time last year. That’s after annual sale declines for the majority of the year.

San Diego County is not alone in the slowdown, with sluggish price gains across the nation — especially in high cost markets — for most of the year. Analysts have cited affordability constraints, changes in the tax code and comparatively slower wage growth as reasons.

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Mark Goldman, a real estate analyst with C2 Financial Group, said the numbers were a bit surprising given that August is peak buying season. However, he said affordability pressure in San Diego County will likely lead to what he considered more sustainable price gains, but not a major drop in the market.

“Prices leveling off are something to keep an eye on, but not a reason to panic,” he said. “Will prices plummet? I don’t think so.”

Lower interest rates did not seemingly stimulate the market. Goldman said lower rates typically mean there is concern about the economy, so it’s not always a reason to celebrate.

The rate for a 30-year, fixed rate mortgage was 3.62 percent in August, said Freddie Mac, down from 4.55 percent at the same time last year.

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Gary Kent, a La Jolla-based real estate agent, said he hasn’t heard a ton of excitement from buyers about lower interest rates. Probably making it easier for some agents, Kent said sellers are becoming more aware that price gains have slowed a bit.

"(The market) is not too cold, it’s not too hot. It’s right in the middle,” he said. “There are some people that are saying they will buy when the market crashes. I think they are going to be disappointed.”

There are signs the housing market will start to pick up steam in the coming months, said Chris Thornberg, economist and founding partner of Beacon Economics. He said prices would be the last thing to change in a market already stimulated by low interest rates. He said there are already signs showing a turn, especially with national home sales being up.

“By the end of the year, price growth is going to be up again and next year it will be a very healthy number,” he said. “It is all driven by the fact that these interest rates are low and giving a lot of life to the market.”

Here’s how August’s numbers broke down by home type:

Resale single-family homes: Median price of $630,000, down from peak of $649,000 in June. There were 2,403 sales, 81 more than August 2018.

Resale condos: Median price of $440,000, a new all-time peak. There were 1,103 condo sales, four fewer than the same time last year.

Newly built homes: Median price of $710,000, down from all-time high of $812,500 in October 2018. There were 329 sales, seven fewer than August 2018.

After months of growing inventory, it appears the number of homes for sale is back on a downward path. There were 6,738 homes listed for sale in August, said the Greater San Diego Association of Realtors, down from 7,613 at the same time last year.

The overall median price in the six-county Southern California market, $535,000, was the same as it was last August.

San Bernardino County had the biggest price jump, up 5.3 percent to a median of $346,000. It was followed by Riverside County, up 2.6 percent to a median of $390,000; Ventura County, up 2.1 percent to a median of $599,000; and Los Angeles County up 0.7 percent to a median of $619,000.

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San Diego and Orange counties were the only places with price reductions. Orange County’s median was $719,500, down 1 percent from the same time last year.

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©2019 The San Diego Union-Tribune

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