Are Home Prices Up or Down 5.4%?

Posted on August 10, 2017 | by Denny Oh

With only 234 condos for sale in all of downtown (only including what’s Active on the MLS), inventory continues to remain low even though we’ve seen a 2.1% increase in new listings – some of which is from Pacific Gate.  So far, there have been 14.8% fewer sales in 92101 year-over-year, even though market time has decreased by nearly 19%.  August has started off slowly and the general consensus amongst realtors, is that listings are not getting a lot of showings.  I don’t know if that’s due to the heat, politics, or people wanting to keep their money in the stock market.  Either way, downtown has seen a 5.4% increase in the median home price YTD.  At $525,00 (YTD), downtown is slightly below the county median price of $595,000, which is up 8.2% YTD.   

I still think this is a very fair market and neither sellers, nor buyers are in complete control.  Multiple offers are not the norm and even though they do happen, it’s usually only when a seller/agent has intentionally underpriced a home.  Countywide, homes are selling for about 98.6% of the list price for condos and 97.8% for detached homes. 

I’m not sure if we’re in a bubble, but it doesn’t feel like one.  People aren’t overpaying for homes and lenders aren’t giving away easy money.  In my opinion, people are buying for the right reasons (they want to own versus renting, or they want to have a second home, etc – not because they want to make money) and places like downtown are going to increase in demand significantly over the next several years.  I’ve been watching and selling real estate in San Diego since 2004 and I’ve never been more excited to see how downtown San Diego is changing.  We’re finally getting to where we should be and once we’re a true “live-work-play” city, home prices will make a huge jump.  I don’t know if that’s in 5 or 10 years, but looking at East Village, Little Italy and all the development happening all over downtown, I’m guessing it’ll be sooner than later.

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