The housing market reached new price peaks in 2017, shattering records left over from the 2005 housing boom.
Home prices rose as the number of homes for sale continued to drop — even more so than previous years. Meanwhile, the number sales stayed about the same.
Strong job growth, low unemployment and historically low interest rates all contributed to rising prices, said Mark Goldman, finance and real estate lecturer at San Diego State University.
“If you look back at 2017, it was a robust year,” Goldman said. “Interest rates were quite good, the economy was continuing to barrel ahead, wages were strong, employment was strong and millennials were aging into the homebuying market.”
How prices compare
The median home price reached $529,000 last year, above the $500,000 peak in 2005 and 2006. Still, when adjusted for inflation, last year’s median is about $11,000 less than what it was in the housing boom.
Inventory was down
Nationwide home inventory is down, not just in Southern California. A lack of home construction during the recession is seen as a reason because housing units did not keep up with natural population growth. In San Diego County, the monthly average home listings last year were about 5,000 homes, down from roughly 7,000 in 2014.
Sales were up in 2017
The number of home sales sold each year for the last decade has not varied much despite fewer homes on the market and rising prices.
Homes sold fast
Increased competition for the reduced number of homes for sale meant homes stayed on the market for fewer days. Last year, a home sold in an average 31 days — the fastest since at least 2006 when the Greater San Diego Association of Realtors started keeping records.
Communities with the fastest price growth
The median resale home price in Ocean Beach had the biggest increase in San Diego County in a year, rising 21.9 percent to a median $1.06 million. Other communities with big increases were Pauma Valley, Solana Beach, Spring Valley and Logan Heights.
Where the most sales are happening
With new home construction way below historical averages, most buyers seek out a resale home. The most sales took place in North County, largely dominated by Oceanside.
Neighborhoods with the biggest gains since the boom
Since 2005, several neighborhoods have seen home prices increase by more than 40 percent. The highest was small Warner Springs in unincorporated San Diego County, followed by La Jolla and Grantville.
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