San Diego home price drops for the first time this year

San Diego’s home price gains were stopped in their tracks for the first time this year in June.

The median home price in San Diego County was $890,000, CoreLogic reported this week, down $5,000 from May. The median, which combines sales for newly built homes, resale condos and resale single-family homes, was still up 7.2 percent annually.

Any slowdown in June is rare because it is typically referred to as the “summer buying season” as parents look for homes before school restarts. The median home price — the point at which half the homes sold for more and half for less — had increased each month since December.

Home sales have never been lower for this time of year. There were 2,546 home sales in June, the lowest ever for that month in San Diego County in records dating to 1988. For context, in June 2008 during the worst of the Great Recession, there were 3,077 sales.

Daniel Fefferman, a Del Cerro-based real estate agent, said there is still a limited number of San Diegans willing to sell their homes because they will likely have a much higher mortgage rate — not to mention prices are up considerably over the past few years across the nation.

“The challenge for home sellers is prices haven’t come down and interest rates have stayed high,” he said. “So they are asking, ‘where am I going to go?’”

However, there were more homes listed for sale in June than any point in the past two years. The Redfin Data Center said there were roughly 5,000 homes for sale across the whole county in June, up from 3,300 at the same time last year and about tied with June 2022.

Even with more homes on the market, sales are not going up. One issue Fefferman said he’s seen is buyers are already stretched thin with interest rates and rising prices, so they balk at any homes that need the slightest repairs.

He recently sold a home that was a “turnkey” project in City Heights, meaning it had been remodeled in 2018 and needed no repairs. The 1,012-square-foot home, listed for $769,000, received five offers, he said, and four were over asking price.

Mortgage rates have been decreasing since a high point of 7.79 percent in October, but are still higher than the 3 percent average in the glory days of 2021. On the last day of June, the average interest rate for a 30-year, fixed-rate mortgage was 6.86 percent, said Freddie Mac.

Based on June’s median price and interest rates, the monthly payment would be around $5,100 (assuming 20 percent down). If you bought a median priced home three years ago in San Diego County — when it was $749,000 and the average interest rate was 3.02 percent — the monthly payment would be roughly $2,900.

Mark Goldman, a real estate analyst with C2 Financial Corp., said there is a strong case to be made that home prices are at their peak or, at least, that the pace of growth will slow. He didn’t think the market would crash, or even that prices would change much, but it was hard to ignore the key indicators.

“I used to tell my students, ‘The signs are everywhere,’” he said of increased for sale signs. “When the market is red hot, properties aren’t available for open houses. Now you are seeing three to four signs when you go to the market on Sunday, when you didn’t see any before. My point is that that starts happening when the inventory starts backing up.”

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

Resale single-family: Median of $1,000,000 with 1,512 sales. It is down from its peak of $1,007,500 reached the previous month.

Resale condo: Median of $717,500 with 751 sales. It is down from its peak of $723,000 in April.

Newly built: Median of $671,000 with 117 sales. This figure combines single-family homes, townhouses and condos. It was down from a peak of $1.2 million in July, when there was an influx of newly built single-family homes, lifting the median higher.

It was a mixed bag across Southern California in June, with the total median home price narrowly up in the six-county region. Here’s a look at the median prices in the counties:

Los Angeles County: Monthly rise of 0.6 percent for a median of $890,000; up 7.5 percent annually.

Orange County: Up 0.8 percent in a month to a median of $1.2 million; up 15.2 percent in a year.

Riverside County: Down 0.9 percent monthly for a median of $580,000; up 5.5 percent annually.

San Bernardino County: Monthly drop of 2.1 percent for a median of $475,000; up 3.3 percent in a year.

San Diego County: Down 0.6 monthly to a median $890,000; up 7.2 percent in a year.

Ventura County: Monthly rise of 3 percent to a median of $850,000; annual rise of 5.1 percent.