SAN DIEGO (KGTV) — Home prices in San Diego had their biggest drop in 14 years in August. However, many buyers are finding that homes are even more unaffordable now than when prices were at their peak this past spring.
According to the monthly report from the S&P Case-Schiller Indices, San Diego home prices fell 2.5% from July to August, the largest monthly drop since 2008. While prices were still up 12.7% from the previous August, that's far from the 20-30% increases that were seen earlier in the year.
However, the drop in prices have been more than counter-balanced by rising mortgage rates, which this week have topped 7%
“You have unhappy buyers and sellers simultaneously," real estate broker Bridget Potterton told ABC 10News San Diego. She says more and more buyers are being pushed from the market because rising interest rates mean monthly payments are now thousands of dollars more than they would have been even when prices were higher. At the same time, because there is less competition for homes, sellers are having to cut prices, leaving some to feel they may have missed out on their peak opportunity.
“Sellers oftentimes right now can feel a little frustrated. Maybe I should have sold my home six months ago because my neighbor sold, had five offers in three days and my home’s been on the market for 30 days," Potterton said. However, she still cautions that San Diego remains in a seller's market. She also suggests that because San Diego remains far below average in terms of number of homes on the market, when interest rates are lowered, prices could fly back up.
Potterton says one benefit for buyers is that because there is less competition, there is less pressure to make offers on homes quickly and over asking price. In addition, she says she's starting to see some sellers return to a willingness to consider accepting contingent offers (in which the seller agrees to wait until the buyer has sold their previous home) or provide other benefits, such as repairs to the property.
