2018 was an odd year in Real Estate in San Diego. January through May were booming and then everything slowed to a snail’s pace for the remainder of the year. Overall, inventory declined while prices continued to climb slightly.
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 2018 and what that might mean for affordability in 2019. All of the statistics are for single family homes comparing average prices 2018 to 2017, except for downtown where I compared condominium sales.
North Park had been enjoying a popularity boom for several years, but last year the area took a big hit as sales dropped by 23% with only 197 sales compared to 258 in 2017. Much of the popularity in North Park has been driven by flipping homes, but as prices rise, there are fewer opportunities for flippers, thus reduced inventory. Prices rose by 5% last year, from $752,445 to $787,276.
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. However, for the second year in a row, the number of homes sold in Scripps declined. 2017 sales were down by 5% but in 2018 sales dropped by 23% from 315 sales to 242. Home prices increased by 7% from $970,091 to $1,037,031. 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 though at a slower rate.
The number of homes sold in Encinitas also dropped for the second year in a row, from 428 to 386, a 10% decline. And even though average home prices are over $1 million, Encinitas nevertheless saw a price increase of 10%, from $1,384,725 to 1,516,845. 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 as high as this last year.
Oceanside is still relatively affordable but also saw a large drop in sales last year, down 20% from 1562 to 1253. Average prices climbed by 5% from $573,512 to $599,567. Another area with prices similar to Oceanside is the neighboring city of Vista, also on my radar for affordability in 2019. As baby boomers continue to age developments that cater to seniors will be in greater demand. Oceanside has several very popular 55+ communities where we have seen prices increase over the last few years.
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. That being said, they did see a significant drop in sales in 2018, down 18% from 1653 to 1356. Average prices rose from $577,923 to $609,269.
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 sales were down by 20% from 532 to 424 last year, but prices were up by 5% from $557,503 to $587,069. 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 13% fewer sales, a drop from 694 in 2017 to 602 last year. Prices rose 5% from $600,666, to $629,053. 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 slightly throughout 2019.
Like Escondido, Spring Valley is not that well known by most people, but an area of opportunity. Home sales were down by 17% in 2018 with sales dropping from 604 to 501. Prices increased by 6% from $470,134 to $497,367. 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. For the second year in a row there was a significant decrease in the number of homes sold, down 17% from 1662 to 1376. Prices rose slightly at 4% from $580,000 to $603,662. 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.
As the number of single family homes in the downtown area is insignificant, I looked at the numbers for condominiums. Interestingly, unlike single family homes in other areas, the average sale price downtown actually decreased slightly from $641,581 to $640,067. Building continues but has the market for downtown condos been over-estimated? Sales were down by 15% from 876 in 2017 to 747 last year.
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.
I think 2019 might have a slight uptake in spring but I don’t anticipate that the number of home sales will increase dramatically in most areas, if at all. Likewise, we will probably see some small price increases but most likely less than 6%.
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 SD MLS to research each area. 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 should be considered an opinion.