Are there any affordable homes in San Diego County?
If you were a home buyer last year, I hope you found a home you can afford. Many people did not as shrinking inventory put the squeeze on values making prices out of reach in many areas. Let’s take a look at a snapshot of some popular areas across the county and see what really happened to the real estate market in 2017 and what that might mean for affordability in 2018. All of the statistics are for single family homes comparing 2017 to 2016.
North Park has been enjoying a popularity boom for some years now, and last year was no exception. Inventory was down, but only by 1% which might be attributed to the number of flips in the area that kept homes coming on the market. This did not seem to impact price as the average price rose by13% from $663,733 to $749,171. 13% is one of the higher price increases in the county. As the competition to find suitable homes to flip increases, it is likely we will see inventory drop and prices continue rise in 2018 perhaps at a rate to equal 2017.
Scripps Ranch remains one of the most popular suburban areas in the county and was one of the few places to bounce back fairly quickly following the Great Recession. The number of homes sold in Scripps last year was down by 5% but home prices increased by 9% from $887,023 to $969,266. As neighborhoods start to hit the $1 million price tag for homes, we generally see price increases start to slow down, but given Scripps popularity for families, I would wager that we will continue to see values increase this year at a similar rate.
The number of homes sold in Encinitas dropped by 16% in 2017 making it one of the places hardest hit by shrinking inventory. And even though average home prices are over $1 million, Encinitas nevertheless saw a price increase of 4%, from $1,332,033 to $1,388,468. La Costa and parts of Carlsbad saw similar increases as the coast continues to be highly desirable. The lack of new homes being built in the area will likely continue to make inventory tight and force prices still higher though I would not anticipate increases much above the 4% we saw last year.
Keep your eyes on Oceanside as this is one of the areas I would tag as affordable, especially if you’re an investor. Although Oceanside has many different areas, overall 10% fewer homes sold last year. Average prices increased by 8% from $529,225 to $571,288, but keep in mind these are average prices so there are homes available for less. Another area with prices similar to Oceanside is the neighboring city of Vista, also on my radar for affordability in 2018.
Another area that I would tag as affordable and ready for appreciation is Escondido. Overall 7% fewer homes sold last year and the average price increased by just 6% from $545,364 to $579,718. Escondido has a very diverse range of homes ranging from luxury properties to small starter homes. Many people are unfamiliar with the area but I see it as an area of opportunity for homeowners and investors alike over the next few years.
Ramona used to be considered too far out east for most people who work in San Diego, but we’ve seen that change dramatically over the last ten years. Ramona’s inventory was down by just 1% last year, but prices were up by 10% from $506,523 to $559,404.
If you don’t mind the commute it is a very affordable place to buy for homeowners. Rents are still a bit soft however, so it might not be the best place for an investor to buy, unless holding the property for the long game.
La Mesa has been gaining in popularity over the last few years as more people discover its charm and great location. Inventory was tight in La Mesa with 10% fewer sales which drove prices up by 9% from and average of $545,530, to $598,542. La Mesa also has a wide range of housing types including luxury view homes on Mt. Helix and small 2 bedroom bungalows. I see prices continuing to rise at the current level throughout 2018.
Like Escondido, Spring Valley is not that well known by most people, but an area of opportunity. Home sales were down by 10% in 2017 and prices increased by just 6% from $439,322 to $467,633. Because of its proximity to downtown via Hwy 94 it is not only a convenient location for homeowners, but an affordable market for investors. I would not be surprised if home prices in Spring Valley increased by more than 6% this year.
Since the 1980’s which saw the development of Eastlake, Chula Vista has been a Mecca of new affordable homes in well-planned communities. Most of these areas are east of the 805 freeway and no area of San Diego County has felt the inventory squeeze quite as much as Chula Vista with 19% fewer homes being sold last year overall, and in 91911 a whopping 27% fewer homes sold. This drove prices up by 10% in some of the newest areas and 7% overall, from an average of $537,396 to $576,913. Building of new homes continues in this area but is currently unable to meet demand, so it is likely that we will see another year of price increases.
This list of communities is obviously not comprehensive, but all of San Diego County continues to be a magnet for people from across the world and competition for affordable housing will likely continue as long as new housing starts remain sluggish. And it’s not just people coming into the area impacting the situation; current homeowners who may want to buy up or down-size are reluctant to sell because of the shortage of homes available and the fear that they will sell and not be able to find a suitable and affordable replacement property.
If you are considering buying for the first time, or selling your current home and buying another, don’t let these numbers scare you. Sales are happening and it all comes down to working with a Realtor who knows how to get your offer accepted without over-paying in a bidding war. Curious? Please give me a call and I’ll be happy to show you how I sell homes for top dollar, and help my clients get their offer accepted. And as always, your referrals are greatly appreciated.
Note: I used the statistical reporting function of the Sandicor MLS to research each area and all statistics are deemed to be reliable but are not guaranteed. My predictions regarding future appreciation are based on analysis of last year’s numbers and my knowledge of the particular market area. Lacking a crystal ball however, my predictions do not come with a guarantee J