The price of a home in San Diego could rise more than 8 percent this year, more than anywhere else in the country, according to a forecast released Tuesday.
Real estate analysts CoreLogic said the price of a single-family home in San Diego County will rise by 8.3 percent from November 2020 to November 2021. That means the median price in San Diego could be around $ 776,000 by the end of the year.
CoreLogic said the main reason is the lack of homes for sale that will cause prices to rise as buyers fight it. A secondary factor is income growth for highly skilled jobs in San Diego County.
It is not uncommon for homes in San Diego to increase significantly within a year. In fact, single-family homes rose 9.5 percent here last year – but the forecast is remarkable because CoreLogic predicts that most markets will slow down price increases. in most markets.
The only areas that, according to real estate analysts, will climb as much as San Diego: Miami, which is forecast to increase 3.2 percent; Los Angeles, with 3.2 percent; and Washington, DC, by 2.9 percent. CoreLogic said the total national increase should be about 2.5 percent.
“San Diego is just one of the markets with a lot of revenue growth and not enough supply to meet the demand,” said CoreLogic Deputy Chief Economist Selma Hepp.
She said San Diego is an example of what has been seen across the country: high-wage workers who could work from home increased wealth during the pandemic, while low-wage workers lost their incomes because their jobs were among first closed during downtime.
“Income inequality is exacerbated by it all,” Hepp said.
For people with the money to buy, there are not as many options as in previous years. As of mid-December, the Redfin Data Center said 3,763 homes are being offered for sale throughout San Diego County. While December is usually a very slow month for sales activity, it is still the lowest in recent memory. Around the same time in 2019, there were 5,182 homes for sale and 7,471 in 2018.
Realtors in San Diego County said in 2020 potential sellers want to await the pandemic before placing their homes on the market. Some of the thinking was to not want to move during the crisis, as well as to prevent potential buyers from walking through the house and taking COVID-19 with them.
Yet analysts say supply constraints in California can be explained not only by a lack of homes for sale, but also by the delay in building homes. In the third quarter of 2020, San Diego County built approximately 6,691 homes. Although it appears to be on course longer than 2019, it is still lower due to boom times when 17,306 dwelling units were built in 2004 and 15,258 in 2005.
Nathan Mother, head of San Diego real estate analysts, London Mother Advisors, said the local building is among what is needed for a growing population. He said the data for the state-certified housing plan for the province, which outlines how many homes would be needed from 2012 to 2020, shows that the region is short of more than 35,000 housing units.
“We only build half of what we need,” he said.
Although it seems to many San Diegans that house prices here are too high, CoreLogic said that is not the case. It ranks markets according to undervalued, normal and overvalued. It only says that a market is too high if the growth of the house price is 10 percent or more of the household income in that region.
Valued markets are said to include Denver, Las Vegas, Miami, Phoenix and Washington, DC, but San Diego is ‘normal’ due to the increase in household income growth that is being increased by higher paying jobs. CoreLogic used data from the U.S. Bureau of Economic Analysis that increased personal income in the San Diego metro by 4.2 percent, above the national average of 3.5 percent.
The price of a resale of a single-family home in November was $ 717,000, says CoreLogic data provided by DQNews, slightly below an everyday high of $ 730,000 in October.
While raising prices can be difficult for potential buyers, it means good luck to homeowners in San Diego County.
Hepp said the increased capital for owners means they can use it to improve their homes, buy it to buy a second property, or to sell and buy a new place in a cheaper market.
CoreLogic does not predict that all markets will rise in 2021. He said, for example, that Houston – hit hard by declines in the oil industry and the recent hurricane season – would drop prices by 1.4 percent by November 2021.
Trends in San Diego County may mean that the largest generation, millennials, will mostly be tenants. According to a study by LendingTree, released Tuesday, the San Diego subway is not as popular among millennials, who tend to be poorer than Generation X and baby boomers.
LendingTree says of the 50 largest subways, January 1 to December 15, 2020, San Jose had the largest share of purchase requests for mortgage loans by millennials by 62 percent. I was followed by Boston, Denver and Minneapolis with 59 percent, and Buffalo and San Francisco with 58 percent.
San Diego was number 35 on the list, with 51 percent of millennials making the purchase requests. Las Vegas was the least, at No. 50, with 43 percent.