San Diego Housing Market (2022 Statistics & Forecast)

San Diego Housing Market

San Diego house price trend

Speaking of inflation: it's nothing new. It - and other kinds of inflation (LUXE-FLATION) - have impacted our markets for decades. Right now it is very high fueled by explosive demand out of balance with supply chain recovery issues, under-production of energy resources, labor shortages, lots of cheap capital....and rampantly rising rents fueled by under-building.

The real estate market forecast shows signs of a somewhat slower bloom. Accounts of less crowded open houses, fewer private showing requests, longer days on market, and fewer offers on new listings are becoming more common. Due to the inherent time lag from a buyer's offer acceptance to a successful close of escrow, we are unlikely to see any significant statistical changes in the market until later in Q3.

When an overheated market starts to lose steam, (last seen in both 2020 and 2016), leading indicators start to reflect the shift with fewer multiple offers, gradual increases in available inventory and days on market, and a plateau of year-over-year appreciation rates.

As we've seen in prior downturns, after the downturn runs it's course, home prices begin to accelerate often quickly above the previous peaks. Buyers should be ready to take advantage of a slowing market and sellers it's more important than ever to prepare your home to shine in it's best light and price correctly.

July 1st 2022 San Diego real estate agents

As expected interest rate increases are to blame for San Diego real estate sales down one-third year over year. Prices of sold homes increased 13% for single-family and 16% for condos and townhomes. New listings were down as homeowners were in a “wait and see” freeze. 

Soaring costs + 19.8% and declining housing affordability - 16.8% new home builds are slowing, builder confidence is at a two year low reported by the Commerce Department. Comparing August 2021 through July 2022, pending San Diego sales were down 17.3% from 12 months prior. Pending home prices over $5M increased 19.8%. Condos and townhome prices increased 19.4%. Inventory was up 21.7% for all price points and residential property types. San Diego almost has two months supply of single family homes with only 1.5 months supply of townhomes and condos.

Now let's look at the charts.

Inventory has been climbing lately. Note that rising inventory alone does not signal a weakening market. Look to the Market Action Index and Days on Market trends to gauge whether buyer interest is keeping up with available supply.

San Diego real estate market - San Diego Inventory

This week the median list price for San Diego, CA is
$1,199,000 with the market action index hovering around 61. This is less than last month's market action index of 70. Inventory has increased to 927.  

The market has been cooling over time and prices have recently flattened. Despite the consistent decrease in Market Action Index (MAI), we’re in a Seller’s Market (where significant demand leaves little inventory available). If the MAI begins to climb, prices will likely follow suit. If the MAI drops consistently or falls into the Buyer’s zone, watch for downward pressure on prices.

San Diego real estate market - Market Action Index

The market plateau is seen across the price and value. The price per square foot and median list price have both been reasonably stagnant. Watch the Market Action Index for persistent changes as a leading indicator before the market moves from these levels.

San Diego real estate market - Price Per Square Foot

Each segment below represents approximately 25% of the market ordered by price.

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San Diego Real Estate Market

San Diego real estate market data for single-family homes priced under $1M compares July 2022 from July 2021

 

  • The average total market time was 22 days up 29.4% 
  • The absorption rate is 1.4 months up 40%  
  • The average price per square foot is $516 up 8.6%.  There were 1,217 new listings down 38.3%.
  • There were 823 total pending sales down 45.1% and 676 total sold down 53.8%

San Diego real estate market data for single-family homes priced $1,000,000-$2,000,000 compares July 2022 from July 2021

 

  • The average total market time was 19 days up 17.6% 
  • The absorption rate is 2 months up 53.8%  
  • The average price per square foot is $636 up 10.4%.  There were 753 new listings up 3.3%.
  • There were 467 total pending sales down 13.8% and 435 total sold down 37.6%

San Diego real estate market data for single-family homes priced $2,000,000-$3,000,000 compares July 2022 from July 2021

 

  • The average total market time was 27 days up 35% 
  • The absorption rate is up 26.3% at 2.4 months
  • The average price per square foot is $805 up 13.5%.  There were 148 new listings up 2.1%.
  • There were 78 total pending sales down 10.3% and 89 total sold down 34.1%

San Diego real estate market data for single-family homes priced $3,000,000-$5,000,000 compares July 2022 from July 2021

 

  • The average total market time was 37 days up 15.6% while the average active market time was 30 days up 7.1%.
  • The absorption rate is down 21.2% at 2.6 months
  • The average price per square foot is $1009 up 19.1%.  There were 81 new listings down 2.4%.
  • There were 43 total pending sales down 21.8% and 53 total sold up 23.3%

San Diego condo market data for all condos, townhomes, penthouses, and rowhomes priced $1M-$2M compares July 2022 from July 2021

  • The average active market time was 21 days down 16%.
  • The absorption rate is down 9.5% at 1.9 months.
  • The average price per square foot is $842 up 5.6%. There were 142 new listings down 0.7%
  • There were 93 total pending sales down 8.8% and 100 total sold condos down 18.7%

San Diego condo market data for all condos, townhomes, penthouses, and rowhomes priced $2M-$3M compares July 2022 from July 2021

  • The average active market time was 56 days down 21.1%.
  • The absorption rate is down 37.2% at 2.7 months.
  • The average price per square foot is $1,257 down 2.6%. There were 22 new listings down 18.5%
  • There were 5 total pending sales down 66.7% and 11 total sold condos down 8.3%

San Diego condo market data for all condos, townhomes, penthouses, and rowhomes priced $3M-$4M compares July 2022 from July 2021

  • The average sales price in this price band $3M-$4M condos is down 6.8%
  • The average active market time was 12 days down 90.7%.
  • The absorption rate is down 65.7% at 2.3 months.
  • The average price per square foot is $1,375 down 33.8%. There were 3 new listings down 62.5.
  • There were 6 total pending sales and 5 total sold condos up 25%
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June 5th 2022

Increasing inflation, soaring home prices, mortgage interest rates moving up to 6% (and over depending on the loan product), and declines in both the stock and cryptocurrency markets have caused a nationwide cooling of demand. The federal reserve increased rates by 3/4 of a point in June in a response to May's 8.6% inflation reading which is the largest one-time interest rate increase since 1994. June all San Diego single family home sales were down 35.5% with pending down 39.8% and sales down 33.1% for condos and townhomes with pending down 37%. However, homes priced over $5M were up 29.7%

Single family homes in San Diego had an inventory increase of 25% with a 6% increase for condos/townhomes. San Diego's median sales price was up 12.8 percent to for single family homes and 16.0 percent for condos and townhomes while monthly mortgage payments have increased 50% year over year....

This week the median list price for San Diego, CA is $1,250,000 with the market action index hovering around 78.  This is less than last month's market action index of 85.  Inventory has increased to 724. Inventory has been climbing lately. Note that rising inventory alone does not signal a weakening market. Look to the Market Action Index and Days on Market trends to gauge whether buyer interest is keeping up with available supply.

May 1st, 2022 

realtor San Diego

Single family detached home sales decreased 18.4% while condos and townhomes are down 14.4 percent with an increase in inventory of 2% for single family and 22.3% for condos/townhomes. Median sales prices were up 15.1% for single family with a 5% decrease in days on market and sales prices up 22.3% for condos/townhomes with a 11.1% decrease in days on market . Single family home inventory increased 20% for single family & 10% condos/townhomes. May pending sales decreased 22.8% for single family homes and 19.6% for condos/townhomes indicating a probable decrease in June closed home sales for San Diego.

This week the median list price for San Diego, CA is $1,198,000 with the market action index hovering around 95.  This is an increase over last month's market action index of 89. Inventory has increased to 365.  

Home sales continue to outstrip supply and the Market Action Index has been moving higher for several weeks. This is a Seller’s market so watch for upward pricing pressure in the near future if the trend continues.

Listings for single family homes declined by 15.8% and condos/townhomes declined 9.3% in April. We have to assume the inventory problem is directly related to the sharp rise in interest rates and the lack of any move-up product. Closings in April were down 18% for single family homes and 27% for condos and townhomes.

When looking at monthly indicators, the days on market to closing are relatively the same, but inventory has a staggering difference, 20% less for single family homes and 36% for condos/townhomes. May's closings will most likely reflect an 18-20% decline with pending sales down 18.9% and condos/townhomes down 18.7%.

The highest level since 2011, Freddie Mac reported the average 30 year fixed rate was above 5% for April.  Mortgage applications are down, and some buyers have stepped out of the market.  Leading indicators suggest competition for homes may be cooling somewhat.

San Diego Home PricesSan Diego housing market

We do not foresee a price decrease in our housing market.  We do foresee a tight inventory market for many months ahead.  In a recent CoreLogic survey, 33% of respondents noted they would wait to buy or not buy at all rather than make sacrifices on their purchase.  This tells us we have many savvy buyers on the sidelines waiting for the perfect property, something that our team has also experienced with our luxurysocalrealty.com database. 

Will house prices drop in San Diego 2022?

It's unlikely San Diego housing prices will drop next year in 2022 and highly likely prices will have increased over 10% from 2021.

Is it a good time to buy a house in San Diego?

San Diego home prices increased 18.8% year over year in May 2021 and are forecasted to increase an additional 10.9% over the next 12 months. 30-year mortgage rates are just below 3% helping bridge the affordability gap.

Is San Diego in a housing bubble?

The 2005 bubble was a combination of irresponsible borrowing, high-risk lending, and rampant loan fraud.  Loan underwriting over the past 13-14 years has been responsible and prudent, mortgage rates are less than half of what they were in 05, and we have an imbalance of for-sale homes and demand.

Homeowners need three factors to be evident in order to make the difficult decision to walk away from their home and let it go into foreclosure (creating a housing bubble).

1. They need to expect that they'll never be able to afford this mortgage payment.

2. They need to be upside down, owe more on the loan than the house is worth.

3. They need to expect that they'll never be able to sell the house.

Demand is the factor to understand when predicting future foreclosure.  There is record equity growing each day and homeowners can sell within days to 2 weeks.

San Diego Real Estate

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April 2022

As the first third of 2022 draws to a close, again we are experiencing a rather un-nerving level of turbulence and day-to-day surprises. Volume-wise the markets remain strong: expecting a repeat of 2021 seems irrational as interest rates rise rather notably, but higher prices should compensate dollar-volume-wise. The price escalations of rentals - while currently border-line insane in areas continue. We are not building nearly enough affordable home options which will keep supply and demand out of balance for years. Add in the cost to build today compared to 3 years ago, replacement costs are soaring.

March 2022- March 2021 closed sales in San Diego were down 10%, in fact, first-quarter sales declined 10%. March residential listings were down 16.3% Condo and townhome inventory has declined by almost 50% from a year ago. Interest rate increases will result in more cash buyers that have been on the sidelines and foreign buyers. Interesting fact - half of the buyers in the first quarter in Downtown San Diego were second homes or investors. Typically it runs more in line with one-third.

Expectations are for the Fed to hike the Fed Funds Rate by .50% next week. This move has no impact on mortgage rates. Currently, at 2.84%, the 10-year note yield is below its peak of 2.98% which happened on 4/20. Signs of stabilization in home loan rates could come if the 10-year remains below 3%. Rates will move another leg higher if the 10-year moves back above 3%. Slow growth and high inflation reflected in the Core PCE predict an uncertain future.

March 2022 

Residential real estate closings were down 11% compared February 2021 to February 2022 and new listings were down 16%, while the sales of homes priced over $1.0 million were up 38%. Single-family homes and condos and townhomes have hardly a half month supply of inventory. Condo, townhouse, and rowhome inventory has halved in the past year.  Closed escrows for all properties are down 10.3% and homes for sale are down 40.8% over the last 12 months.

According to Freddie Mac, 30 year mortgage interest rates have surged to the highest rate in 3 years, 4.6% in March.  This was an increase of 1.4 percent since January.  

Specifically, in the industrial sector, the San Diego commercial industrial vacancy rate is the lowest in two decades at 3.2%. Along the 905 Freeway in the Otay Mesa area, eight million square feet of industrial space has been recently completed, under construction, or planned. Amazon will create more than 25,000 jobs with a 3.2-million-square-foot distribution center and a 700,000-square-foot facility with construction underway.

February 2022 

The national unemployment rate is back to 4%, where it was pre COVID. San Diego unemployment rate ended 2021 at 4.2% with leisure and hospitality and professional and business services leading the way. Venture capitalists raised almost $100 billion nationwide in 2021. Just behind Los Angeles, San Diego came in 6th place for venture capital funding. Since 2014, San Diego venture capital has increased with a substantial increase in the last two years. It's important to note that the West Coast dominates with half of the top ten in venture capital funding.

In 2021 over 3,000 single family homes were permitted for new construction. Resales were down 12% for single-family homes and 10% for condos and townhomes in January , with new listings down. Comparing 2020, 2021, and 2022 this is the third year in a row that year over year new listings were down at the beginning of first quarter.

Market indicators show homes for sale inventory has declined by nearly half for both single family homes and condos and townhomes. With pending sales down, February closings will be much lower than in years past. Single family detached homes priced under $500,000 are virtually nonexistent in San Diego county now reported at 3%.

This week the median list price for San Diego, CA is $999,900 with the market action index hovering around 86. This is an increase in last month's market action index of 83. Inventory has decreased to 356 units from 466 units in October, and 530 units in September.  

2022 Statistics and ForecastSan Diego house price trend

San Diego buyers are worried are they are buying at the top?

San Diego sellers are worried have they missed the top, is it too late?

Property Shark just published their top 100 list of the most expensive housing markets with Rancho Santa Fe #18 followed by Coronado and Del Mar.

As of December 4th nationwide initial job claims were 184,000, virtually the same as pre-COVID (a great indicator of the overall economy) San Diego County is up 61,600 jobs since last October with leisure and hospitality jobs still lagging pre-Covid levels. The nationwide unemployment rate will end the year at around 4%.

Since November 2020, resale prices in San Diego County have advanced by 18.5%, following a pattern of recent months. With low cost of borrowing and high equity, right now is a really good time to move up and keep your prior primary as a rental property. This trend has played into inventory falling each year, year over year.

Construction costs are out of control with a labor shortage. Lumber prices have increased to more than $1,000 per 1,000 board feet from $300 per 1,000 board feet. Fixtures like plumbing, lighting, and appliances are stuck on ships (most are manufactured overseas.) More than 1.7 million units of new single family residences, condos, and apartments were underway in 2021 with the highest production level since the last great recession. 2022 expects production of 1.5M-1.7M units with a return to more normal once backlogs are filled. The recently approved Federal Public Works legislation will contribute to a significant increase in non residential construction primarily in the public sector.

6.46 million existing single family homes and condomiums sold in 2021, a decade high with the supply reduced to 3.1 months. Residential real estate purchases made by investors were surprisingly high with more than a quarter of homes sold to investors in 2021. With a very very tight supply of available homes and mortgage rates rising, resales will decline to between 5M-5.5M.

When the Feds begin to increase the discount rate, there will be an immediate effect on the 10-year T-bill. The 10-year T-bill determines mortgage rates. It's expected mortgage interest rates will be 3.75%-4% by the end of 2022. With increasing home prices affordability will be affected.

Residential new construction for San Diego in 2022 will add approximately 9,000 housing units. The nonresidential sector will be explosive with government-funded projects:

  • New Terminal 1 at the airport
  • New border crossing in Otay Mesa
  • Continued military spending
  • Highway construction.
  • Continued development of life sciences and industrial space

2021 we had an average of 2.75% 30 year fixed mortgage rates, $842,000 median single-family home price, an increase of 18.6%. Condos and townhomes $545,176 median home price and an increase of 18.5%.  Home price appreciation for San Diego County is anticipated to be 8%.

Friday December 3rd 2021

This week the median list price for San Diego, CA is $999,900 with the market action index hovering around 86. This is an increase in last month's market action index of 83. Inventory has decreased to 356 units from 466 units in October, and 530 units in September.  

October 2021 Update: 

According to CoreLogic San Diego was in second place nationwide in the ranking of metropolitan areas by price growth over the last year with an annual acceleration of 26.2%. Phoenix has had the strongest home price growth among the 20 markets, Phoenix is number one. surging 33.3% in August 7-percentage points faster than San Diego. San Diego experiences the largest deceleration in high tier price growth, up only 0.2% and down 1.7-percentage points from July. Average monthly gains in the high tier slowed more in August, up only 1% on average compared to July’s 1.7% monthly gain.  Single family home inventory is down nearly a half from 2021 while condo/townhome inventory is down 60%.

September 2021 Update: Sales were up again for August with single-family home sales up 15% while condos and townhomes were up 30%.  With September pending sales are on par for September 2020.  Single-family home inventory is down 39% while condo and townhome inventory are down 56%!!!!!!

August 2021 Update:  The US unemployment rate declined to 5.4% adding 1 million jobs with most sectors in California recovering to pre-COVID levels. 40% of the job losses since COVID began were in the leisure and hospitality sector which still remains soft throughout the US. Faring better in the leisure and hospitality industry in San Diego, we are only 36,900 jobs away from pre-COVID levels. Overall job growth was stagnant in San Diego with only 6,700 jobs added. San Diego construction employment is almost 5% over 2020 up 8% for new single family homes and apartment construction. Both for sale and rental units total 9,147 underway in nine new master-planned communities. Single family detached homes are up 20.7% with a median price of $875,000 and attached condos, townhomes, and rowhomes are up 17.8% with the median price of $530,000. San Diego months’ supply of inventory is less than one month with days on market short of 2 weeks. August pending sales totally stagnant.

July 2021 Update: New construction starts up one-third over 2020, with more than 3,500 single family homes, condos, and apartment buildings now underway. Driving the San Diego residential real estate market, this will help our overall resale market grow.  Late 2021 and 2022 there will be 10+ $500-$1M brand new master-planned communities (most in North County.)

January - June 30th single-family home sales were up 25% and condos and townhomes were up 44%. Our days on market until sale are less than three weeks and we are less than one month's supply of inventory for both single-family homes and condos townhomes.

Documented days on market are not always truly accurate. Sometimes the listing agent does not update the MLS with the true pending date accidentally and on purpose (if they have a thin buyer), or because they are fishing for more buyer calls.

San Diego's median price of detached homes is now up 29.3% and the median price condos and townhomes 22.2%.  This is due to white-hot demand both locally and from other markets as well as low interest rates.

The month-over-month acceleration in pricing is not rational and at some point will not be able to sustain itself. We will know more this fall if we may have plateaued when kids are back in school and the market normally cools a bit from the summer.

June 2021 - Quick San Diego Economic Stats: San Diego is now below 7.0% for unemployment Since January 2021 San Diego has gained 50,000 jobs.  We have practically zero Foreclosures. During the first four months of 2021 San Diego new home building permits are up 27% from 2020. 8% for single-family homes and 39% for condos and multifamily rental units.   

Primarily in NorthCounty San Diego, there will be 10+ new master-planned communities.  New homes by TriPointe will be at Citro in Fallbrook, The Highlands in Pacific Highlands Ranch, and Playa Del Sol in South San Diego.  There are 9 left at Bayside Cove a luxury enclave by Lennar in Mission Bay.   

January through May the sales of single-family homes were up 26% while condos and townhome sales are up 44%. San Diego sellers received around 104% of asking price with less than one month of inventory.

The Biden Administration announced that July will be the final month of the foreclosure moratorium and rental evictions.

Nationally there are around 2 million properties in forbearance. Many are wondering what's going to happen when these homeowners have to begin paying their mortgage again. Is this the spiral that will burst the San Diego housing market bubble? Compass La Jolla agents LUXURYSOCALREALTY track the supply and demand metrics in each of our markets. These metrics forecast future prices and sales many months into the future. When the moratorium is lifted in San Diego, demand will determine whether or not San Diego has a housing market bubble.

This week the median list price for San Diego, CA is $979,450 with the market action index hovering around 97. This is less than last month's market action index of 99 because inventory has increased to 488. Inventory has been climbing lately however rising inventory alone does not signal a weakening market.

The median list price of $979,450 has paused around this plateau which is normal, many years the plateau goes from June into August.

In the last few weeks, the market has achieved a relative stasis point in terms of sales to inventory. However, inventory is sufficiently low to keep us in the Seller’s Market zone. The market plateau is seen across the price and value. The price per square foot and median list price have both been reasonably stagnant.

housing market forecastMay 2021 - New construction starts, which are the key indicator of the housing market has increased 29% from the first quarter of 2020. For the first four months of 2020, closed sales for single-family are up 16% and condo/townhomes are up 34%. At the end of April San Diego had 3,270 single-family homes and condo/townhomes pending at an increase of one-third over April 2020. Our months’ supply of inventory is 0.7 for both single-family homes and condos and townhomes. As home values continue to escalate, the median single famliy home price is up 24.4% and condo/townhome prices are up 21.8% in April 2021 over April 2020.

April 2021 - January and February, San Diego County had a 31,900 job gain which is typically the gain for an entire year. Because San Diego is heavily reliant on the leisure and hospitality industries the unemployment rate is marginally above the national rate. The average number of daily recorded documents by the San Diego County Assessor is an indicator of real estate and business activities. Through March recordings are up 68% over 2019. San Diego's resale real estate market is up 10% over last year. Pending sales were up nearly 53% from a year ago by the end of March with single-family homes were up 41% with condos and townhomes up 77%. Month's supply of inventory is down another 10 basis points from March 2021. From March 2020 the price for single-family homes is up 20.7% and for condos and townhomes 14.4% for condos and townhomes.

housing statsMarch 2021 - February closings were at 2,500 closings from February 2020 at 2,361 and pendings are also up showing confidence in market acceleration for March. Supply of inventory continues to decline. February 2020 we had 2 months of inventory and now we have less than three weeks of inventory on single family homes. Single family median price was up 15.2% $102,877 and the median price for condos and townhomes were up 14.7%

February 2021 - January 2021 closings were right on par with closings in January 2020 with pending listings up indicating an even stronger February. Prices are up 11-12% January 2021 over January 2019 with single family homes $744,000 and condos and townhomes at $485,000. When looking at inventory we have around one month of supply rather than what's typical, multiple months. Single family homes inventory is around three weeks with condos and townhomes at one month. Lender-mediated sales, short sales and foreclosures were one-tenth of one percent of the inventory just eight hundred fifty one sales.

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