Total new-home closings: 2,003
The good: With prices dropping and permits up, Metrostudy predicts a stable path ahead.
The bad: Starts were down in the first quarter of 2015, as nearly a quarter of home buyers can no longer afford new properties.
The bottom line: With corrections showing in sales prices and confidence showing through increased permits among builders, this market aims for continued success.
As the average price of new homes dropped by 11.5% in the first quarter of 2015, compared with the fourth quarter of 2014, that change couldn't come quickly enough for the 23% of home buyers who can’t afford new properties in San Diego. With a difference of nearly $170,000 in the median prices of new homes and resale properties (with the latter being the most affordable), those buyers already have been forfeited to existing homes. A wave of market activity in the fourth quarter of 2014 fueled a 5.2% increase in new-home closings in the first quarter of 2015, while starts decreased by 7.8% over the same period. But, with a total of 687 single-family permits arriving in January and February 2015—totaling 27% of all permits approved for the previous year—followed by a 19% year-over-year increase in March, Metrostudy predictions call for a fairly stable path ahead for builders.