'People are tired of waiting': San Diego home price hits all-time high even as mortgage rates rise

This story is for subscribers

We offer subscribers exclusive access to our best journalism.

Thank you for your support.

Despite the jump, there was little change in the number of sales or home inventory. There were 2,306 home sales, a slight increase from previous months but still the second-slowest March in records going back to 1988. The lowest for that month was 2008 when there were 2,108 sales.

Alan Gin, economist at the University of San Diego, said prices would likely continue to rise because current homeowners have locked in lower mortgage rates and are not eager to sell, keeping inventory low.

"The gap between the mortgage people have, and what they would have to pay if they sold, is huge," Gin said. "Because of that, people are not selling their homes."

A nationwide survey of homeowners from Redfin last week found nearly 40 percent of homeowners said they couldn't afford their home if they were to try and buy it today.

In the last week of March, the average interest rate for a 30-year, fixed-rate mortgage was 6.79 percent, said Freddie Mac. It had risen to 7.43 percent by Monday morning, said Mortgage News Daily.

Interest rates have made a large difference in buying a home at San Diego's median home price in just two years. If a buyer purchased a home at the median in March 2022 — $805,000 — with interest rates at that time, 4.67 percent, the monthly cost would be about $3,753 (assuming 20 percent down). In March's numbers, the monthly cost would be roughly $4,932.

There were roughly 3,600 homes for sale in San Diego County in March, up from around 3,000 at the same time last year. However, sales were down from nearly 6,000 in the summer of 2022 before interest rates rose to 6 percent.

Samantha O'Brien, a San Diego real estate agent, said she had six listings in March and early April, and five had offers over the asking price. She said two condos both had offers of $20,000 over the asking price.

O'Brien said interest rates are on buyers' minds and there is a lot more scrutiny of numbers — but the home shoppers in the market now tend to be determined.

"People who are interested in buying are definitely in the market to buy," she said. "People are tired of waiting. If they want to buy, they are going to figure it out."

Rising rates are playing out somewhat differently in other parts of the nation. For instance, parts of Florida and Texas have seen surges in homes for sale and stagnating prices. Part of the reason for the difference is more homes are being built. In 2022, according to census numbers, Texas issued 263,054 residential building permits and Florida had 211,962. That compares with 119,667 in California.

Not everything can be attributed to homebuilding, especially in Florida, which has seen the biggest increase in inventory. The state has seen large increases in home insurance costs, brought on by extreme weather events, wrote Newsweek, which have prompted some owners to leave.

Here's how different home types in San Diego County fared in March:

• Resale single-family: Median of $975,000 with 1,439 sales. It is a new high, up from the previous peak of $956,000 in August.
• Resale condo: Median of $689,000 with 756 sales, which was a new price peak. The previous was $683,000 in February.
• Newly built: Median of $813,000 with 69 sales. This figure combines single-family homes, townhouses and condos. It was down from a peak of $1.2 million in July, when there was an influx of newly built single-family homes, lifting the median higher.

All markets in Southern California saw price increases in March. Here's a look at the median prices — the point at which half the homes sold for more and half for less — across the region:

Los Angeles County: Up 0.6 percent in a month for a median of $850,000; up 6.3 percent in a year.

Orange County: Monthly rise of 3.6 percent to a median of $1.15 million; annual increase of 17.3 percent.

Riverside County: Monthly rise of 1.7 percent to a median of $577,000; up 7.9 percent in a year.

San Bernardino County: Up 2 percent in a month for a median of $500,000; up 4.2 percent in a year.

San Diego County: Monthly rise of 4.8 percent for a median of $865,000; annual increase of 9.5 percent.

Ventura County: Up 0.2 percent in a month to a median of $825,000; up 6.5 percent in a year.