San Diego Real Estate Market Update - July 2023
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Monthly Indicators
Temperatures are heating up, yet the U.S. housing market remains cooler than usual for this time of year due to a combination of low inventory and higher borrowing costs, which have restricted market activity going into the summer homebuying season. According to the latest data from the National Association of REALTORS® (NAR), national existing-home sales climbed 0.2% from the previous month but were down 20.4% compared to the same time last year, as fluctuating mortgage rates and a near all-time low level of inventory continue to influence home sales.
Closed Sales decreased 27.6 percent for Detached homes and 24.2 percent for Attached homes. Pending Sales decreased 6.2 percent for Detached homes and 12.3 percent for Attached homes. Inventory decreased 27.7 percent for Detached homes and 22.7 percent for Attached homes.
The Median Sales Price was up 2.5 percent to $1,000,000 for Detached homes and 2.8 percent to $650,000 for Attached homes. Days on Market increased 20.0 percent for Detached homes and 11.1 percent for Attached homes. Supply increased 5.3 percent for Detached homes and 14.3 percent for Attached homes.
Nationwide, total housing inventory increased 3.8% from the previous month, for a 3-month’s supply at the current sales pace. The shortage of homes for sale has kept prices high for remaining buyers, with a national median sales price of $396,100 as of last measure, a 3.1% decline from the same time last year and the largest annual decrease since December 2011, according to NAR. As demand continues to outpace supply, properties are selling quickly, with the majority of homes listed for sale on the market for less than a month.
Housing Supply
Limited existing-home inventory continues to be a boon for homebuilders, who have ramped up production to meet the rising demand in the new-home market. Housing starts were up 21.7% month-over-month as of last measure, the fastest pace in more than a year, while housing permits increased 5.2% month-over-month, according to the U.S. Census Bureau. Renewed interest in new homes this year has helped builder confidence increase to its highest level since July 2022, according to the NAHB / Wells Fargo Housing Market Index (HMI). For the 12-month period spanning July 2022 through June 2023, Pending Sales in the San Diego were down 32.6 percent overall. The price range with the smallest decline in sales was the $1,000,001 to $1,250,000 range, where they decreased 20.2 percent.
The overall Median Sales Price was up 1.3 percent to $805,500. The property type with the largest price gain was the Condos – Townhomes segment, where prices increased 3.3 percent to $620,000. The price range that tended to sell the quickest was the $250,001 to $500,000 range at 29 days; the price range that tended to sell the slowest was the $5,000,001 and Above range at 65 days.
Market-wide, inventory levels were down 26.2 percent. The property type with the smallest decline was the Condos – Townhomes segment, where they decreased 22.7 percent. That amounts to 2.0 months supply for Single-Family homes and 1.6 months supply for Condos.
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