More homes for sale as San Diego housing market picks up

San Diego home prices fell for a second month in July as the number of homes for sale hit its highest point of the year.

The median home price in San Diego County was $885,000, CoreLogic reported Wednesday, down $10,000 since May. The median, which combines sales for newly built homes, resale condos and resale single-family homes, was still up 4.1 percent annually.

San Diego County also fell out of the $1 million club, with its single-family home price dropping to $980,000. For two months, it was one of only two Southern California Counties, joining Orange County, with a million-dollar home median.

Mark Goldman, a real estate analyst with C2 Financial Corp., said the home price drop was likely because of an increase in home inventory.

“It’s all supply and demand,” he said. “If you are listing your home for sale, and your neighbor is listing their home for sale, it becomes a competitor to you. The more properties that are on the market, the more competition there is. That will soften the market.”

There were more homes available for shoppers in July than any point this year. Roughly 5,260 homes were listed, according to the Redfin Data Center, down from around 3,000 in January.

Jan Ryan, a real estate agent in Ramona, said the biggest demographic of sellers are parents moving out of California to be closer to children who already moved out of state.

She put a 1,664-square-foot single-family house in Ramona for sale in early August for $739,000 and it was off the market in three days. Ryan said they received two offers near the asking price.

Despite the added inventory, buyers will still likely need to act fast. Redfin said 40.5 percent of homes in July were off the market in two weeks. Still, that is better than the 60 percent in January when there were very few homes for sale.

More homes on the market made for more sales. There were 2,839 home sales in July, low by historic standards for a July, but nowhere near the lows seen earlier this year. For context, there were 1,678 home sales in January.

One thing helping buyers were steadily decreasing mortgage rates. On the last day of July, the average interest rate for a 30-year, fixed-rate mortgage was 6.78 percent, according to Freddie Mac, down from the high point of 7.22 percent this year in May.

Mortgage rates have continued to fall. The average rate was 6.35 percent last week, according to Freddie Mac.

Federal Reserve Chair Jerome Powell indicated last month that an interest rate cut was coming soon, which could mean lower mortgage rates. Mortgage rates follow the yields on mortgage-backed securities. These bonds typically track the yield on the U.S. 10-year Treasury.

Goldman argued the change could mean little because home prices would likely rise if more people, motivated by lower rates, are trying to get in the market. He said more competition would likely add to bidding wars.

Here’s how different home types in San Diego County fared in July:

Resale single-family: Median of $980,000 with 1,711 sales. It is down from a peak of $1,007,500 reached in May.

Resale condo: Median of $725,000 with 843 sales. It’s a new price peak, up from the previous high of $723,000 in April.

Newly built: Median of $951,000 with 141 sales. This figure combines single-family homes, townhouses and condos. It was down from a peak of $1.2 million last July, when there was an influx of newly built single-family homes, lifting the median higher.

Home price gains were mainly down, or flat, across Southern California in July. The exception was San Bernardino County, which had a substantial price increase. Here’s a look at the median prices in the counties:

Los Angeles County: Flat month-over-month for a median of $890,000; up 7.9 percent annually.

Orange County: Down 2.5 percent monthly for a median of $1,180,000; up 10.3 percent year-over-year.

Riverside County: Up 0.9 percent in a month for a median of $585,000; up 6.4 percent in a year.

San Bernardino County: Monthly rise of 5.3 percent for a median of $500,000; up 6.4 percent annually.

San Diego County: Down 0.6 percent monthly to a median of $885,000; up 4.1 percent annually.

Ventura County: Down 0.9 percent in a month to a median of $842,000; up 3.2 percent year-over-year.