05 Apr Report: San Diego real estate beats national averages

Prices of homes for sale in San Diego County shot up 6.9 percent in January over the last 12 months — beating national averages, according to S&P/Case-Shiller data released last week.

From December to January, the median home price in San Diego County, adjusted for seasonal variation, rose  1.1 percent. San Diego continues to beat national averages. The national average median home price from December to January increased 0.6 percent. In January, prices rose 5.4 percent in January over the last 12 months, compared to 6.9 percent in San Diego County. Nationally, Portland, Seattle and San Francisco were the markets with the most gains; San Diego ranked 8th, tying with Los Angeles.

San Diego real estate in jeopardy?

Despite the increases, San Diego real estate experts remain concerned about lower housing inventories and low supply hurting the local real estate market.

Those factors have increased housing prices and rents locally, and experts worry that it could stagnate future growth. The county had the lowest drop in home inventory at 30.2 percent from January 2015 to January 2016, real estate data showed. U.S. Census data found more people left San Diego than moved in, with housing a major reason, despite the area’s relatively healthy economy.

Affordability remains an issue. In San Diego County, the median home price was $455,000 in February and average rent was $1,618 a month. Last year, only 229 single-family homes built in the county were less than $500,000, building experts said. At the same time, per capita income in San Diego County is $51, 459, according to 2014 Census figures. More than a quarter of the population spends half their income on rent, a recent study found

That has caused some new challenges in the real estate market. Multiple offers and higher offer prices are common and a lack of affordable housing has caused would-be homeowners to put off buying or find less expensive housing in other areas. The market shows no sign of slowing down soon, with major commercial, retail and housing developments underway.