San Diego Housing Market Update June 2023

San Diego home prices on the rise as buyers compete over fewer houses for sale.

Even higher interest rates have not caused a dramatic shift in the San Diego Housing Market. In June 2023 San Diego County home prices rose 1.4% overall.

While interest rates are still limiting affordability for many buyers, experts say, the few buyers left are forced to fight it out for a limited pool of homes for sale.

Roughly 62 percent of U.S. homeowners have a mortgage rate of 4 percent and lower, said a Redfin study. As of the last week in May, the average rate for a 30-year, fixed-rate mortgage was 6.57 percent, said Freddie Mac.

“You have simply locked out a lot of people who aren’t willing to walk away from that rate,” said Chris Thornberg, economist and founding partner of Los Angeles-based Beacon Economics.

There were 2,887 homes for sale in San Diego County in May, said the Redfin, down 28 percent from the same time last year. There were about double, roughly 6,000, homes for sale in August. The median days on market before a sale dropped to 11.7 in May, its lowest in a year.

While you are looking at the housing prices in San Diego, make sure you take a look at the list to price ratios. This is the most telling sign of the state of the housing market. The list to sale price ratio in real estate is a metric that measures the relationship between the initial list price of a property and the final sale price. It is calculated by dividing the sale price of a home by its original list price, and then multiplying by 100 to express it as a percentage. For example, if a home was listed for $500,000 and sold for $480,000, the list to sale price ratio would be 96% ($480,000 / $500,000 * 100).

This ratio provides insight into the negotiation dynamics between buyers and sellers in a specific real estate market. A higher list to sale price ratio indicates that homes are typically selling close to or above their initial list prices, suggesting a competitive market where sellers have more leverage. Conversely, a lower ratio indicates that homes are selling below their list prices, indicating a market where buyers have more negotiating power.

Real estate professionals and market analysts use the list to sale price ratio to assess market conditions, determine pricing strategies, and gauge overall buyer and seller behavior. It can be influenced by factors such as supply and demand dynamics, local market conditions. Currently in San Diego, the list to sale price ratios is 101.3%. This shows that homes are selling for OVER the asking price.