San Diego Real Estate Market Update – September 2021
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Monthly Indicators
The booming U.S. housing market has spilled over to the rental market, which has seen demand for apartment and single-family rentals skyrocket this year, as high sales prices and an inadequate supply of available housing have forced many prospective buyers to rent for the foreseeable future. Increased demand for housing, along with an improving economy, has competition for rental units soaring, and landlords are taking note, with the national median rent increasing 11.4% in 2021 so far, according to Apartment List.
Closed Sales decreased 8.9 percent for Detached homes but increased 4.6 percent for Attached homes. Pending Sales decreased 5.0 percent for Detached homes but increased 7.6 percent for Attached homes. Inventory decreased 39.1 percent for Detached homes and 56.3 percent for Attached homes.
The Median Sales Price was up 15.0 percent to $850,000 for Detached homes and 18.9 percent to $560,000 for Attached homes. Days on Market decreased 28.6 percent for Detached homes and 37.9 percent for Attached homes. Supply decreased 44.4 percent for Detached homes and 63.6 percent for Attached homes.
In new construction, home builders continue to struggle to meet buyer demand, as housing starts nationwide dropped 7% last month, according to the Commerce Department. Single-family home construction declined 4.5%, and multi-family home construction, which includes condos and apartment buildings, was also down, falling by 13%. Labor shortages, rising material costs, and supply-chain setbacks continue to challenge builders, with some projects temporarily paused due to availability and cost of materials.
Housing Supply Overview
With housing prices soaring and record-low inventory throughout much of the country, many prospective buyers have opted to rent for the time being, only to find conditions much the same in the rental market. Indeed, competition for rental properties is strong: the national median rent has increased 11.4% since January, and rent growth this year is surpassing the average growth over the same months from 2017 – 2019 in 98 out of the 100 largest cities in the nation, according to Apartment List. For the 12-month period spanning September 2020 through August 2021, Pending Sales in the San Diego were up 18.1 percent overall. The price range with the largest gain in sales was the $5,000,001 and Above range, where they increased 131.7 percent.
The overall Median Sales Price was up 16.0 percent to $702,000. The property type with the largest price gain was the Single-Family Homes segment, where prices increased 18.6 percent to $805,000. The price range that tended to sell the quickest was the $500,001 to $750,000 range at 19 days; the price range that tended to sell the slowest was the $5,000,001 and Above range at 89 days.
Market-wide, inventory levels were down 45.7 percent. The property type with the smallest decline was the Single-Family Homes segment, where they decreased 39.1 percent. That amounts to 1.0 months supply for Single-Family homes and 0.8 months supply for Condos.
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