‘Uncertainty creates paralysis’: San Diego home sales tumble during peak season

Spring is typically one of the busiest times for the real estate industry. Not this year.

There were 2,384 home sales in San Diego County in May, said Attom Data Solutions, down 9% from the year before. For context, it might make some real estate agents long for the Great Recession. In May 2008, there were 3,140 home sales and, in May 2009, 3,250.

San Diego isn’t alone in a slowdown. National home sales are down 11% annually. Experts cite still high mortgage rates and many sellers refusing to budge on asking prices — which is keeping home prices from falling much — as the biggest reasons for sluggish sales.

In May, the San Diego County median home price stayed at $900,000 for a second month, down 0.2% annually. It was the first time the median decreased on an annual basis, albeit by a small amount, since May 2023. The median is a combination of all closed sales of single-family houses, townhouses and condos.

Mark Goldman, a real estate analyst with C2 Financial Corp., said there are several aspects of the economy that might be weighing on buyers’ minds when it comes to their ability to pay back a mortgage over the next 30 years: tariffs, rising inflation, and, for some business owners, labor shortages.

“Uncertainty creates paralysis,” he said. “People aren’t likely to jump into a big decision like a new home.”

Mortgage rates in May were near one of their higher points for the year. The average for a 30-year, fixed-rate mortgage was 6.89% in the last week of May, said Freddie Mac. That would make for a roughly $5,100 monthly payment for a median priced San Diego County home — and that is assuming a 20% downpayment of $180,000.

The high cost of a San Diego home, in relation to local wages, is a factor for many buyers and likely a big reason why houses and condos are taking longer to sell. The median days on market for a county home in May was 25 days, said the Redfin Data Center. That’s up from 16 days at the same time last year, and 12 days in 2023 and 2022.

One might expect home prices to drop but Goldman said sellers probably don’t feel as much pressure if they are still living in the home until it sells and have a locked-in lower interest rate. He said it is a different scenario for homes that are vacant, and sellers might be more likely to go down in price.

Still, some sellers might be feeling the pressure with so many homes sitting on the market. The number of homes listed for sale rose to about 6,800 in May. That compares with 4,800 in 2024, 3,200 in 2023 and 4,270 in 2022.

Attom said the median sale price, the point at which half the homes sold for more and half for less, was $1 million for single-family homes, up 1% in a year. Condos and townhouses were down 2.7% annually for a median of $681,000.

San Diego received a dubious distinction in May from a closely watched report that ranks metro areas by unaffordability. The Demographia International Housing Affordability report ranked San Diego as the 10th most unaffordable metro in the world for purchasing a home. Hong Kong and Sydney, Australia, were listed as the most expensive metros.

California was all over the list, which compares median house prices in a market to the median household income. Los Angeles was ranked as the No. 5 most unaffordable housing market, San Francisco as No. 8 and the Riverside metro area at No. 24.

A few cities that were considered easier to afford a home than San Diego in the Chapman University study included London, Toronto, New York, Dublin and Montreal. On the plus side, San Diego isn’t getting more unaffordable, having been ranked No. 10 last year as well.

Here’s a look at median prices in May across the region:

Los Angeles County: Up 2.8% in a month for a median of $915,000; Also a rise of 2.8% annually.

Orange County: A monthly rise of 0.8% to a median of $1.2 million. Flat year-over-year.

Riverside County: Down 1.5% monthly to a median of $599,000; Down 1.8% annually.

San Bernardino County: Monthly drop of 2.8% for a $515,000 median; Up 1% in a year.

San Diego County: Flat monthly for a $900,000 median; Down 0.2% in a year.

Ventura County: Down 1.1% in a monthly to a median of $865,000; Up 3% annually.