San Diego home sales pick up; single-family home price nears $1 million

San Diego County home sales picked up in October as mortgage rates dropped to their lowest level of the year.

There were 2,372 home sales in October, a 19% jump from September, CoreLogic said. The median home price was $879,000, down $1,000 from the previous month but still up 7% in a year.

September marked the slowest-ever sales month for that time of year in records dating to 1988. October’s sales are a clear increase but still low by historical standards — it was the fourth-lowest sales month for an October in San Diego County’s history.

Buyers in October benefited from temporary lower mortgage rates. The rate for a 30-year, fixed rate loan dropped to 6.08% — its lowest of the year — at the end of September, said Freddie Mac. Yet rates started to climb throughout the month, reaching 6.72% by the end of October.

Jan Ryan, a real estate agent in Ramona, said she doesn’t hear buyers talking about 6% interest rates as much as you might think. Instead, they seem focused on waiting for them to go even lower.

“The only thing I keep hearing from buyers is they are waiting for it to come down,” she said of mortgage rates.

The effort to keep interest rates low during the pandemic now has a roundabout way of keeping sales low, said Norm Miller, a real estate professor emeritus at the University of San Diego. Because many homeowners have locked in low mortgages, he said, it wouldn’t make sense for them to leave — meaning buyers will have few homes to choose from.

“It will really distort the market for a long, long time,” Miller said. “It’s going to take years to burn off.”

More than 85% of U.S. homeowners have a mortgage rate below 6%, said first-quarter data from the Federal Housing Finance Agency. There are plenty with better rates than that: 76.1% have mortgages under 5%; 57.4% have rates under 4%; and 22% have rates under 3%.

Even if mortgage rates were lower, buyers would have a tough time finding something to bid on. There were roughly 5,450 homes for sale in San Diego County in October, said the Redfin Data Center. That was near a high point for the year, but low by historical standards and not much to write home about in the fifth-most populous county in the U.S.

Scarcity has helped keep prices near record highs. The resale single-family home hit a median in October of $990,000 — inching back toward the $1 million peak reached in May and June.

The resale condo median was $715,000, down from its peak of $723,000 in April, but up from the previous months. The newly built home median was $817,000. That number includes all home types, including townhouses, condos and single-family homes.

Homes were taking longer to sell in October, potentially helping buyers. The median days on market was 28 in October, said Redfin, up from 14 days at the start of June.

Home price gains were mainly up across Southern California in October. Here’s a look at the median prices in the counties:

Los Angeles County: Up 2.9% in a month for a median of $875,000; up 5% year-over-year.

Orange County: Down 2.1% monthly with a median of $1.15 million; up 6% annually.

Riverside County: Monthly rise of 0.9% to a median of $585,000; annual rise of 5.4 percent.

San Bernardino County: Up 5.4% monthly with a $525,000 median; up 6.1% in a year.

San Diego County: Monthly drop of 0.1% with a median of $879,000; annual rise of 7 percent.

Ventura County: Up 1.2% monthly with a median of $830,000; up 0.7% annually.