04 Aug The San Diego real estate market #3 for worst home supply
The San Diego real estate market is a gold mine for sellers but not so much for buyers, a new study has found.
A study by online real estate firm Zillow found San Diego’s housing market is one of the worst in the nation for buyers — #3 in the nation for the supply of homes — but one of the best for sellers. The supply and demand challenge makes it a “good” problem for those selling San Diego real estate, but particularly challenging for buyers. The supply of homes for sale in San Diego County is down 30 percent over the year, with supply especially constrained at homes valued below $406,450 – pricing many first-time buyers out of the market, and hampering the ability of other sellers to trade up due to lower inventory in middle to upper-range priced homes. The thorny issue could negatively impact the real estate market in San Diego, which is at record levels this summer.
San Diego real estate trails Charlotte, N.C., and San Antonio, Texas as the worst in the country for the area’s supply of homes. It comes after real estate in San Diego broke records in June after a slow start in the spring. Median sales prices of homes for sale in San Diego rose to a nearly eight-year high, reaching pre-recession levels, in June.
The median price for a home for sale in San Diego in June was $476,000, up 5.8 percent from June 2014, according to the latest CoreLogic real estate data. The numbers were the highest since July 2007, when the figures were at $489,000 before the height of the housing recession.
Why is San Diego real estate in such demand?
The low inventory problems feeds on itself, and home values are up 4.6 percent over the year, to a median price of $479,100. Multiple home offers are not uncommon, but the low supply of inventory makes the low supply even worse, because would-be buyers have problems purchasing inventory in their price range. Real estate analysts said the supply of homes is extreme because there are still some homes underwater – 8.6 percent of home owners in San Diego owe more on their homes than what they are worth.
Because the housing market is so competitive, many prospective sellers are sitting out at the same time that sales have slowed. There were 4,467 home sales in the county in June, less than two months’ supply. Demand is expected to become even worse as the economy continues to improve.