San Diego Housing Market // Monthly Review
February 2022 San Diego Housing Market Numbers
$957,500 Median Sales Price Detached Homes – UP
$670,000 Median Sales Price Attached Homes – UP
$850,000 Median Sales Price All Properties Combined – UP
The U.S. real estate market remains hot ahead of the spring selling season, with existing home sales up 6.7% as of last measure, according to the National Association of REALTORS®. Experts attribute the growth in sales to an uptick in mortgage interest rates, as buyers rushed to lock down their home purchases before rates move higher. Mortgage rates have increased almost a full percentage point since December, with the average 30-year fixed rate mortgage briefly exceeding 4% in February, the highest level since May 2019.
Closed Sales decreased 11.3 percent for Detached homes and 6.6 percent for Attached homes. Pending Sales decreased 15.6 percent for Detached homes and 18.2 percent for Attached homes. The Median Sales Price was up 13.4 percent to $957,500 for Detached homes and 22.0 percent to $670,000 for Attached homes. Days on Market decreased 22.7 percent for Detached homes and 25.0 percent for Attached homes. Supply decreased 57.1 percent for Detached homes and 50.0 percent for Attached homes. Inventory was at an all-time low of 860,000 as February began, down 17% from a year ago and equivalent to 1.6 months supply.
According to Lawrence Yun, Chief Economist at the National Association of REALTORS®, much of the current housing supply is concentrated at the upper end of the market, where inventory is increasing, while homes priced at the lower end of the market are quickly disappearing, leaving many first-time buyers behind. The shortage of homes is boosting demand even further, and with bidding wars common in many markets, it’s no surprise sales prices continue to soar.
National Housing Market Update (realtor.com)
The median listing price grew by 14.0% over last year.
Median listing prices are re-accelerating following a fall period marked by steady 8.5% – 9.0% growth. Building on December’s rebound into the double-digits, the median listing price continued rising in the first two months of 2022, picking up speed toward the end of February. As mortgage rates surged almost 80 basis points since December 2021, and are expected to continue to increase, shrinking housing affordability is claiming central place on the list of concerns for more buyers. We are seeing several markets around the country experience price declines, keeping our 2022 Housing Forecast expectation of moderating price gains on track. However, the supply-demand dynamic remains key to price movements.
New listings–a measure of sellers putting homes up for sale–were up 2.1% from last year.
We started the year with a significant shortage of new homes, which compounded the ongoing inventory challenge. In this environment, new home listings are a necessary ingredient for a healthy market, and a key indicator of future home sales. While new listings started on a somewhat weaker note and have trended below previous year levels since the beginning of 2022, the annual rate of decline has steadily improved over time and turned positive for two consecutive weeks. We may be seeing a breakthrough in housing supply, pointing to more homes for sale in the weeks ahead, as the spring season gets underway.
Active inventory is down 22.0% from a year ago.
While new listings offered more options, buyers motivated by rising interest rates kept an active transaction pace, and we still see a sizable gap in the number of homes actively for sale relative to last year. On the plus side, the gap continued to shrink, pointing toward a more promising horizon. However, as rising mortgage rates cut into buyers’ purchasing power, it will be important to keep an eye on both inventory and sales trends to evaluate if rising inventory is the result of an increasing number of sellers or decreasing number of home shoppers.
Strong buyer interest drives time on market down 13 days from last year.
Homes sold unseasonably fast this week, prodding buyers to move quickly on making successful offers, leading to homes spending 13 fewer days on the market. This market can be especially challenging for first-time buyers who may face financing hurdles or work through contingencies. At the same time, buyers may feel caught between a proverbial rock and hard place as they face surging rents, up nearly 20% from a year ago in January. This is especially true in markets in the South and Midwest where homebuyers may spend less on a monthly payment than they would renting.