Consumers in wait-and-see mode as San Diego home prices and sales drop

San Diego County home sales hit their second-lowest point of the year in November as mortgage rates ticked up.

Across the county, 1,913 homes sold in November, down 22.4% from the previous month, according to figures released Tuesday by Attom Data Solutions.

November is typically a slower month for sales, but not to this extreme. It was the second-slowest sales for that month in nearly 40 years of data. Only November 2023 was slower with 1,779 sales.

Experts point to several factors limiting sales: A slight increase in mortgage rates, affordability challenges and rising insurance rates causing sticker shock.

Mark Goldman, a real estate analyst with C2 Financial Corp., said he keeps hearing from potential buyers who are waiting for mortgage rates to go down (although he said that might mean more people in the market and prices going up). Additionally, he said there’s a lot of economic uncertainty about the job market and wages that have kept people on the sidelines.

“There’s just nothing coalescing to improve the housing market,” Goldman said. “A lot of people are like, ‘Well, I better wait and see what happens here.’”

San Diego County’s median home price dipped 0.3% from the previous month to $872,200, and is down 0.1% annually. The median combines sales of single-family homes, townhouses and condos.

Mortgage rates are down from a year ago but were up slightly in November. The average 30-year, fixed-rate mortgage rate was 6.23% in the last week of November, said Freddie Mac. That was up from 6.17% in the last week of October.

Bill McBride, author of the economics blog Calculated Risk, said it was a “big if” that buyers will see a significant drop in rates in 2026. Mortgage rates usually follow the yields on mortgage-backed securities. These bonds typically track the yield on the U.S. 10-year Treasury.

McBride noted a selloff of U.S. government bonds on Tuesday, tied to President Donald Trump’s threats to take over Greenland and use tariffs against nations that opposed the plan, which drove up interest rates. The average 30-year-fixed rate had risen to 6.21% by Tuesday afternoon, said Mortgage News Daily, from 6.01% at the start of last week.

It’s not a guarantee that interest rates will rise with global events, but McBride said it points to the unpredictable nature of the U.S. economy — from tariffs to inflation — that can affect potential buyers’ desire for a large purchase. He said the last time prices were surging was during the pandemic when stimulus checks were sent and wages were growing.

“If people start worrying about their jobs,” McBride said, “that outweighs falling mortgage rates.”

Despite its reputation, California home prices are trailing the nation in growth. Attom said the median home price in California was $735,000 in November, up 0.3% in a year. That’s compared to the nationwide median of $365,000, up 2.8% in a year.

In San Diego County, the median price of a single-family home was $990,000, up 0.6% annually, and the median for condos and townhouses was $665,000, down 0.4% in a year.

Raylene Brundage, a North County real estate agent, said a lot of potential buyers had their typical concerns about affordability and interest rates as reasons for not purchasing last year. Yet she said there is a new concern she keeps hearing from entry-level shoppers: HOA fees. Increases across the nation, not just in Southern California, have been tied to rising insurance rates, inflation and other factors.

Brundage said many young couples, in particular, trying to buy their first San Diego County property, have turned to condos and townhouses only to be stunned by high HOA fees.

“The HOAs are really creating a problem,” she said.

San Diego County’s median prices largely followed similar patterns as the rest of Southern California in November. Here’s a look at medians — the point where half of the homes sold for more and half sold for less— across the region:

Los Angeles County: Up 0.3% in a month to a median of $888,000; up 1.5% in a year.

Orange County: Down 3.6% monthly for a median of $1.15 million; up 0.2% annually.

Riverside County: Flat month-over-month for a median of $599,000; down 0.2% in a year.

San Bernardino County: Up 0.9% in a month to a median of $525,000; down 3.7% annually.

San Diego County: Down 0.3% monthly to $872,200; down 0.1% in a year.

Ventura County: Flat monthly to $850,000; down 0.2% year-over-year.