Generally speaking, San Diego home prices in 2017 rose at a rapid rate. However, that’s not particularly helpful. So, how high did they rise? Since the sales data for December is not complete, we will focus on what happened from the beginning of January 2017 to the end of November 2017.
Detached San Diego Home Price in 2017
The median home price for a detached home in San Diego county rose by about 18% from January to November. In January the median sales price was $530,000 and by November that number rose to $625,000. Limited inventory of homes for sale and continued demand for homes that are not attached – like a condo or townhome – keep driving prices of detached home higher. The chart below shows how the median detached home price in San Diego county rose over the past 11 months.
Attached San Diego Home Price in 2017
The median home price for an attached home in San Diego county rose by about 15% from January to November. In January the median sales price was $351,450 and by November that number rose to $405,000. Even with attached homes there are not many properties for sale, so limited inventory is also supporting these home prices. The chart below shows how the median detached home price in San Diego county rose over the past 11 months.
Trends in San Diego
The Greater San Diego Association of REALTORS® give an update on monthly indicators of the San Diego real estate market and the following are their thoughts as of the end of November:
“The facts of residential real estate have remained consistent in 2017. In year- over-year comparisons, the number of homes for sale has been fewer in most locales, and homes have been selling in fewer days for higher prices. This hasn’t always been true, but it has been a common enough story line to make it an overarching trend for the year.
Closed Sales decreased 14.3 percent for Detached homes and 18.0 percent for Attached homes. Pending Sales increased 2.6 percent for Detached homes and 14.3 percent for Attached homes. Inventory decreased 26.9 percent for Detached homes and 12.2 percent for Attached homes.
The Median Sales Price was up 11.8 percent to $625,058 for Detached homes and 11.6 percent to $407,500 for Attached homes. Days on Market decreased 10.8 percent for Detached homes and 17.2 percent for Attached homes. Supply decreased 26.1 percent for Detached homes and 7.1 percent for Attached homes.
New tax legislation could have ramifications on housing. The White House believes that the tax reform bill will have a small impact on home prices, lowering them by less than 4 percent, and could conceivably boost homeownership. The National Association of REALTORS® has stated that eliminating the mortgage interest deduction could hurt housing, as the doubled standard deduction would reduce the desire to take out a mortgage and itemize the interest associated with it, thus reducing demand. This is a developing story.”
What will happen in 2018?
Realtor.com has six major predictions for the overall United States housing market in 2018.
Here they are:
1. Home price appreciation – Home prices are expected to rise 3.2% next year. This slower rate of increase will allow for home sales to pick up next year.
2. Mortgage rates – Mortgage rates are expected to average 4.6% throughout the year, but reach 5% for the 30-year fixed-rate mortgage by the end of the year. The Mortgage Bankers Association also predicted rates will continue rising, saying mortgage rates could pass 4% or even 5% over the next few years.
3. Existing Home Sales – Existing home sales are forecasted to rise 2.5% as the trend in low inventory begins to reverse course.
4. Housing Starts – Even as existing home sales increase, new home sales will increase even more, meaning housing starts will also rise. Overall, housing starts are predicted to rise 3% over the year, but single-family home starts will increase 7%.
5. New Home Sales – These will increase at the same rate as housing starts, rising 7% year-over-year in 2018.
6. Homeownership Rate – The homeownership rate will stabilize at 63.9% after having hit bottom in the second quarter of 2016, realtor.com forecasted.