Median prices increased for both detached and attached residences in San Diego County throughout the first quarter of 2016. At quarter end, detached homes were priced 7% higher and attached homes were priced 4% higher than the previous March. Collectively, both property types increased approximately 3% since the beginning of 2016, and look to continue this trend as we head into peak buying season over the next two quarters.
The number of homes on the market decreased for both detached and attached housing in San Diego county for March. Following a brief increase in housing inventory in February, March dropped back in line with levels seen in January. The rough news for prospective Buyers is that the inventory levels at the end of March were 15% lower for detached properties and a whopping 26% lower for attached properties than March of the previous year. Lack of supply continues to tip the scales in seller’s favor warranting higher prices, faster escrows, and more seller-favorable terms.
Homes in San Diego County have sold much faster in Q1 2016 than the previous quarter. Thus, the average amount of days each property spent on the market has significantly decreased. The typical amount of days that homes spend on the market is a function of both local supply and demand. Given constant strong demand and limited inventory, it makes sense that homes would be selling faster. Buyers are quite eager to get under contract and close on their new homes.
Affordability continues its creep downward as prices increase at a faster pace than income, given the relatively constant interest rate environment over the last quarter. The variables considered in the San Diego Association of Realtors Home Affordability Index are: median household income, median home values, and average interest rates. This index is a great indicator for future market conditions, as it considers the three main variables that drive the local San Diego County housing market.
