IRVINE and SILICON VALLEY, Calif., Nov. 8, 2017 /PRNewswire/ -- Home sales in San Diego, California accelerated during the second quarter, even as prices reached record highs, according to a new report by Ten-X, the nation's leading online real estate transaction marketplace. Ten-X's Second Quarter 2017 Economic and Single-Family Housing Market Outlook Report for San Diego found the region's homeownership rate is more than 400 basis points higher than one year ago yet dropped slightly during the quarter to 56.6 percent, well below the U.S. rate of roughly 64 percent.
"Homes are moving even as prices continue to rise, but affordability is becoming a much larger concern – especially for people looking to buy their first home," said Ten-X Executive Vice President Rick Sharga. "A growing number of residents are looking at renting as a better option than buying. San Diego's economic expansion is softening as well, with unemployment rising slightly to about 4.5 percent, a bit higher than the U.S. average."
San Diego Homeownership Rate Dips
Sources: US Census Bureau, Ten-X Research
San Diego Home Sales Accelerate
Sources: IHS, Ten-X Research
Existing home sales in San Diego have risen five straight years yet remained 20 percent off pre-recession levels during the second quarter. At a seasonally adjusted annual rate of 41,000 units, sales were 5.6 percent higher from one year ago, far outpacing the rest of the country. However, housing inventory tightened even further, falling 35.7 percent from last year to a seasonally adjusted rate of 4,531 homes for sale.
New housing supplies have not yet recovered from pre-recession levels, with completions of single family homes down 12.3 percent from one year ago. Housing starts, on the other hand, jumped 77 percent from one year ago, yet were still below their prior seasonal peak prior to the recession. Housing permits also saw a significant increase at more than 200 percent year-over-year yet also remain below previous highs.
"High prices, low inventory, tight credit, and few new properties coming onto the market are making things very hard for would-be home buyers. Affordability in San Diego was already at a low level in the first quarter, even before home prices spiked in Q2," Sharga said.
San Diego Home Prices Push Higher
Sources: FHFA, Census, IHS, Ten-X Research
San Diego home prices jumped 9.2 percent year-over-year during the second quarter, significantly outpacing the rest of the nation. The median home price reached a record high of $559,162.
Economic and Demographic Fundamentals
Annual job growth in San Diego cooled from 2.5 percent in the first quarter to around 1.5 percent in the second quarter, about 20 basis points lower than one year ago. Professional and business services, leisure, hospitality and government remained strong sources of local unemployment, with job increases in these sectors higher than the national average.
San Diego's population grew 0.8 percent in 2016 with a net gain of 27,504 additional residents. International migration to the city has been substantial, yet more residents are leaving the city center. San Diegans remain young, with Millennials and young Gen-Xers between 25 to 44 years old making up the city's largest demographic.
Ten-X is the nation's leading online real estate transaction marketplace and the parent to Auction.com, Ten-X Commercial and Ten-X Homes. To date, the company has sold 300,000+ residential and commercial properties totaling over $50 billion. Leveraging desktop and mobile technology, Ten-X allows people to safely and easily complete real estate transactions online. Ten-X is headquartered in Irvine and Silicon Valley, Calif., and has offices in key markets nationwide. Investors in the company include Thomas H. Lee Partners, L.P. CapitalG (formerly Google Capital) and Stone Point Capital. For more information, visit Ten-X.com.