‘This market is brutal right now’: San Diego home price down year-over-year, sales near historic lows

There’s a good chance a home purchased in San Diego County last year is now worth less.

The median home price was $900,000 in June, according to Attom Data Solutions, which combines sales of single-family homes, townhouses and condos. It’s down $15,000 from the same time last year and marks the fourth month in a row, based on revised data, where the median was unchanged.

Month-to-month fluctuations are common, but it is rare for the annual price to drop. The last time this occurred was two years ago.  San Diego isn’t alone with a continued sluggish real estate market, which has been affected by higher mortgage rates, elevated home prices and few sales.

“People are just hesitant right now (to buy),” said Raylene Brundage, a North County real estate agent. “Anybody I talk to is just saying, ‘Wow, this market is brutal right now.’”

There were 2,307 home sales in June, way down from historical norms during the busy summer buying season. Yet it was an improvement from the same time last summer when home sales cratered to 2,169, marking the slowest June in Attom data going back to 2005. That may be little consolation to those in the real estate industry, considering this June saw the second-slowest sales for that month in 20 years.

Brundage said mortgage rates still are a big factor in potential buyers pulling the trigger. She joked that any slim hope of a buyer’s market starting would be hamstrung by the fact there aren’t any buyers.

Mortgage rates are on the decline, but not the big drop some potential buyers may dream of. The average for a 30-year, fixed-rate mortgage was 6.77% in the last week of June, according to Freddie Mac. That’s down from a high this year of 7.04% in mid-January, and the latest data shows an average of 6.58%.

Lower mortgage rates can have a significant financial impact over the life of a mortgage, giving borrowers substantial savings. But given San Diego’s high home prices, buyers could still face sticker shock. For example, the monthly payment for a median-priced San Diego County home would be around $5,000 in June (with mortgage rates at the time) — and that is assuming a 20% down payment of $180,000.

Kelly Cunningham, of the San Diego Institute for Economic Research, said lower interest rates would help speed up the market a bit, but prices are at such a level it would be hard to imagine it making a huge difference.

“These are staggering numbers,” Cunningham said of monthly mortgage costs, and estimated down payments. “How does anyone afford that, especially someone who is trying to establish a new household?”

There’s some evidence to support prices are still out of reach for most San Diegans: Houses are staying on the market longer and the number of homes for sale is higher than it’s been in years.

The median days on market for a county home in June was 28, said the Redfin Data Center. That’s up from 16.5 days at the same time last year, 12 days in 2023 and 13 days in 2022.

There were 7,257 homes listed for sale in San Diego County in June, its highest level in recent memory. At the same time last year, there were 5,337 active listings; 3,488 listings in 2023; and 5,274 in 2022.

Cunningham noted many potential sellers likely have locked in lower interest rates and probably don’t feel as much pressure to lower prices. He said an economic downturn might change the scenario for sellers, but also might dissuade potential buyers from a purchase.

The number of homes sitting on the market still hasn’t made a huge dent in prices. San Diego County’s single-family median home price, the point at which half the homes sold for more and half for less, was $1 million in June, down 1.5% in a year. The townhouse and condo median was $695,000, down 0.6% in a year.

David Ely, a finance professor at San Diego State University, said a home purchase is typically the biggest purchase in a person’s life, and general worry about the economy is affecting the real estate market.

“I do think there are broad economic factors at play here,” he said. “There is uncertainty about where the economy is going.”

Ely said economic fears could prevent a first-time homeowner from committing to a 30-year mortgage, but also discourage current homeowners from attempting to move up from a starter property.

Here’s a look at median prices in June across the region:

Los Angeles County: Flat month-over-month for a median of $915,000; up 2.5% in a year.

Orange County: Up 0.9% monthly to a median of $1.2 million; also up 0.9% annually.

Riverside County: Flat monthly for a median of $600,000; also flat year-over-year.

San Bernardino County: Up 1.9% monthly to a median of $525,000; down 0.2% annually.

San Diego County: Flat monthly for a median of $900,000; down 1.6% annually.

Ventura County: Up 2.9% in a month to $890,000; up 1.7% in a year.