San Diego homes are getting snatched up as quickly as they come on the market, selling within a month and sometimes within a week. With so few homes to choose from, competition among buyers went berserk, forcing many to buy without the normal escape hatches: appraisal and loan contingencies, and in many cases, even without an inspection.
The average 30-year fixed-rate mortgage ended the month at 3.55%, nearly a full point higher than the low of 2.65% recorded in January 2020, with residential borrowing + 93.8% + 8.0% costs now the highest they’ve been since March 2020, according to Freddie Mac. As rates continue to rise, home price growth is predicted to increase at a more moderate pace. While declining home affordability may temper buyer activity, the chronic lack of supply across most housing market segments appears unlikely to change significantly in the near future.
The Median Sales Price was up 19.4 percent to $885,000 for Detached homes and 22.7 percent to $595,000 for Attached homes. Days on Market decreased 7.7 percent for Detached homes and 33.3 percent for Attached homes. Supply decreased 50.0 percent for Detached homes and 63.6 percent for Attached homes.
Closed Sales decreased 10.3 percent for Detached homes and 15.1 percent for Attached homes. Pending Sales decreased 12.7 percent for Detached homes and 17.0 percent for Attached homes. Inventory decreased 42.5 percent for Detached homes and 57.4 percent for Attached homes.
Affordability continues to decline, as inflation, soaring sales prices, and surging mortgage interest rates reduce purchasing power. The sudden increase in rates and home prices means buyers are paying significantly more per month compared to this time last year, which may cause sales to slow as more buyers become priced out of the market.
But we would have to quadruple the inventory to even put a dent in the supply and demand discrepancy.