San Diego County home sales dropped 17.5 percent to the lowest level in 11 years for a September in the first significant sign of a slowdown in the market, real estate tracker CoreLogic reported Tuesday.
Last month, 2,942 homes sold in the county, down from 3,568 sales a year ago. It was the lowest number of sales for a September since just before the Great Recession when 2,152 sold in September 2007. Also, last month’s median home price dropped to $575,000 — the first decrease since January — after hitting an all-time high of $583,000 in August.
Most experts attributed the slowdown to a rise in mortgage interest rates, and the sale price reduction to potential buyers balking at higher monthly payments.
“Mortgage rates (are) another thing that is going to add cost, and temper demand,” said Cheryl Young, senior economist at Trulia. “Rates are hovering around a seven-year high so people are really, possibly, taking a step back before they jump into home buying.”
Young also said home price growth has been outpacing wage increases for a long time, so it was inevitable that would also affect sales. Trulia research shows 26.4 percent of listings in the San Diego metropolitan area had at least one price reduction in August, the most of the 100 metros studied.
San Diego was not isolated in a sales drop in September, with some of the highest priced markets seeing the biggest sales drops.
Rising home prices throughout the year have been largely attributed to a strong economy mixed with strong competition for a limited number of homes for sale. However, the home inventory in September was one of its highest in years, said data from the Greater San Diego Association of Realtors.
There were 7,824 homes for sale in September, up from 5,678 in September 2017; 6,597 in 2016; and 7,134 in 2015.