Home prices dipped slightly in November from October, but were 15 percent higher than in November 2012, according to the Greater San Diego Association of Realtors (SDAR).
The median price of a single-family detached home in November was $469,000, down 1.3 percent from October when the median price was $475,000 and up 15 percent from November 2012 when the median price was $408,000.
The most expensive San Diego County listing sold last month was a 3-bedroom, 4-bath, 3,750-square-foot home in La Jolla that sold for $11 million, according to SDAR.
Linda Lee, SDAR’s president, said she expects prices to continue to rise in 2014, but possibly at a slower pace, closer to 10 to 12 percent.
Alan Nevin, director of economic and market research for the Xpera Group, said he’s surprised the median price has reached that level.
“At the peak of the market way back when it hit about $600,000 and then dropped down to the $350,000-ish range and now it’s back up to $469,000. That is a lot stronger than I would have anticipated,” Nevin said. “My feeling was that once we had this large jump of 22 percent last year, that the rate of increase would fall because I wouldn’t think the market could keep going in the direction. But to reach $469,000 is a great surprise.”
He said it certainly helps people who own homes, but makes it difficult for buyers to afford a new home, especially with interest rates increasing. He expects home prices to continue to increase in 2014, but not at the same pace.
“As long as we keep adding 20,000 jobs a year or more, we will continue to have this huge demand for housing,” Nevin said. “I’m projecting 6 to 8 percent for 2014, which means the average price going up $25,000 to $35,000 a unit, which is a fairly steep increase. It’s just not as steep as in this past year.”
About 12,000 households were added last year, according to SANDAG, Nevin said, and usually about 50 percent of those want to buy a property.
“Since we are not building, then they’re forced into the resale market. And actually what I’m seeing is that all parts of the county are moving forward with their pricing,” Nevin said.
A lack of inventory contributes to the increasing prices year-over-year. There were about 6,500 homes for sale in November, down from the year’s high in October of 7,000, according to Lee. There was less than 1.5 months of inventory in January, and in December that is up to 2.7 months, she said. Six months of inventory is considered a normal market.
Nevin said there is a “desperation” for homes and condos priced under $400,000. There’s an abnormally low level of townhomes in the market, creating a “big hole” in the market, Nevin said. The townhome has always been the entry step for first-time buyers and has also been popular for the move up market, he added.
The median sales price of condominiums and townhomes increased 5 percent from $296,000 in October to $310,000 in November. The November price represents a 19 percent increase from November 2012, when the median price was $260,000, according to SDAR.
There were 761 condominium and townhome sales in November, 19 percent fewer than 944 in October and 10 percent less than 842 sales in November 2012, according to SDAR.
“When you look in this county, the townhouse supply is almost negligible and it’s a function … a lot has to do with zoning around the county,” Nevin said.
The city of San Diego’s zoning goes from single family to apartments and is missing the midrange zone, he said, adding that there is a “huge demand” for these townhomes. The next round will be in Otay Ranch in villages 8 and 9, but those won’t be on the market until 2015, he said. San Diego is building a lot of apartments, which is helping to solve the housing problem -- but it doesn’t solve the for-sale housing problem, Nevin said.
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