Samantha O’Brien, a real estate agent with PorchLight in University Heights, said the home search has been heartbreaking for many clients who are searching for places under $600,000 or so.
Two weeks ago, she and her clients offered $20,000 over asking price on a Chula Vista single-family home on the market for $550,000. They were beat out as the property drew 15 other offers. The sale has yet to close escrow, so the final price is unclear, but O’Brien said it is likely there was a substantial increase — something she has been seeing all over town.
“They are just getting priced out. Everything is just very, very competitive,” she said of her potential buyers. “I’m advising everyone to come in at least $10,000, to upwards of $30,000, over asking.”
O’Brien said potential buyers have other challenges besides higher offers, including buyers paying all cash or removing all contingencies up front. Redfin data showed that in July only about 4 percent of homes had a price drop. That’s down from 4.8 percent in 2019 and 4.6 percent in 2018
Resale single-family homes were July’s market leader in San Diego County, hitting a record of $700,000, up $44,500 from the old record in June. Resale condos also hit a record at $471,500, up about $17,000 from the previous high in March. The median price for newly built homes, which includes condos and single-family houses, was $678,000, down from the record $812,500 in October 2018, when there was an increase in luxury, single-family homes for sale.
Norm Miller, the Ernest W. Hahn chair of real estate finance at the University of San Diego, said the high end of the market is largely responsible for pushing up average prices. He said people that have kept high-paying jobs during the pandemic, and those that have benefited from the stock market, are the ones buying up San Diego’s most expensive homes.
Miller has published research that ties success of the home market to stock prices, which have seen major gains in the last few months — especially with tech stocks.
While San Diego County’s unemployment rate is still near Great Recession-highs — 13.9 percent in June — Miller said many of those workers that lost jobs would not have been able to afford homes to begin with, or represent the very low end of the housing market.
Across the six-county Southern California region, home prices rose 8.5 percent annually in July. The biggest gain was in San Bernardino County, which increased 9.8 percent in a year to a median of $375,000. Riverside County rose 9.1 percent to a median of $430,000; Ventura County was up 6.7 percent to $635,000; Orange County jumped 6.3 percent to $775,000; and Los Angeles County gained 5.5 percent to $670,000.