Written by Justin Culetu
CoreLogic, a real estate analysis corporation, recently predicted that the price of a single-family home in San Diego County will increase by 8.3% from last year’s prices. By the end of the year, the average price of a house in San Diego is expected to be around $776,000.
This percentage increase is the highest out of any other region in the nation. The total national increase is expected to be at 2.5%. Some regions that come close to San Diego’s percentage growth are Miami at 3.2%, Los Angeles at 3.2%, and Washington D.C at 2.9%. Although San Diego’s increase is highest in the nation, that record isn’t foreign to the county, as single-family home prices were up 9.5% last year.
According to CoreLogic deputy chief economist Selma Hepp, the reason for the growth in the market is due to the income increase seen in San Diego. As a result of the pandemic, high wage workers are being prompted to work from home. The personal income in the San Diego metro area increased by 4.5% compared to the 3.5% national average. In addition, the supply of houses has not been able to meet the demand with only 3,763 homes listed for sale this past December compared to the 5,182 on the market in December 2019 and 7,471 in 2018.
Another reason for the market increase is attributed to the decelerated home construction. San Diego real estate analysts London Moeder Advisors claim that home building in San Diego County has not been as abundant as it should be compared to the growing population, falling short 35,000 housing units in the period from 2012 to 2020. In the third quarter of 2020, 6,691 homes were built.
For homeowners, this price increase is good news. With the increased equity, owners can make improvements to their homes, finance the purchase of a second property, or sell and buy in a lower-cost market. For potential buyers, however, the elevated housing prices will make it harder to find an affordable home that checks all the boxes. Ultimately, more people will be forced to rent because they will not be able to afford a suitable home.