The first-quarter Metrostudy data for the San Diego housing market shows a slow selling period at the start of 2014 marked by lack of new-home affordability. Existing home sales in the market dropped year-over-year from 10,073 to 8,387 in 1Q14, a 16.7 percent decrease in sales. New-home sales also experienced a significant decline from 501 new-home closing in 1Q13 to 359 in 1Q14, a 28.3 percent decrease. New-home closings in the last year peaked in the market at 770 in 2Q13, in which many markets peaked across the country.
Median closing prices in the San Diego market have experienced minimal fluctuation quarter-over-quarter in the last year, but are overall on the rise for both new and existing homes. The median existing home closing price reached $398,800 in the first-quarter, up from $353,400 in 1Q13. Existing home prices peaked in the market at $403,000 in 3Q13 in the last year. Even existing homes are unaffordable for the entry-level or first-time buyer. For new homes affordability remains even farther out of reach with a median closing price in the first-quarter at $605,000, up from $525,00 in 1Q13, a 15.2 percent increase. Differing from other high-priced markets, however, San Diego’s median price per square foot is lower for new homes than existing, coming in at a median $257 for new homes in the first-quarter and $275 for existing. This is up for new homes year-over-year from $230 and for existing up from $235.
The average household age of homebuyers in the San Diego market is significantly lower for new homes than existing in the first-quarter at 39 years-old for the new-home buyer and 47 for existing. For the new-home buyer this is lower than the national average household age for new homes at 41 in the first-quarter. Average household income for homebuyers in San Diego fluctuates in the vicinity of $100,000, dropping for new-home buyers in the first-quarter to approximately $89,000.
Growth in starts in the San Diego market speaks to builder confidence is a sales rebound during the remaining quarters of 2014. Quarterly starts reached 777 in 1Q14 and 2,588 annually, up from 519 and 2,530 respectively. Vacant Developed Lot inventory has dropped in the market with the pick up in starts, falling beneath 3,000 for the first time in the last year. Vacant lot inventory market-wide hit 90,668 in the first-quarter down from 90,968 in 4Q13. Housing supply has risen to 9.5 months from 7.1 in 4Q13 and 8.2 in 1Q13. With increased housing supply, home price appreciation will reflect demand in the market.
Learn more about markets featured in this article: San Diego, CA.