San Diego County started the year with a $640,000 median home price brought on by intense competition over limited home inventory.

The January price represents a 9.4% increase in the last 12 months following major gains during the pandemic. It is down from the high of $650,000 reached in September to November last year.

Experts continue to point to low mortgage rates and limited supply as primary reasons the price rose so much in 2020 — and likely will continue to rise in 2021. Analysts also say millennials aging into homeownership and stay-at-home workers wanting a better space are factors in high demand.

It appears the number of homes for sale is not likely to change soon. Many potential sellers have decided to hold back during the pandemic — leaving the most dedicated buyers to compete over a limited number of homes for sale. The pandemic situation has not seemed to change much, even with some vaccines, because of spreading variants.

There were 3,347 active listings in San Diego County from Jan. 4 to Jan. 31. That is down from 5,456 around the same time in 2020; 7,751 in 2019; 5,720 in 2018; and 6,051 in 2017.

Part of the reason listings look so low is that homes are selling so rapidly that it is hard for them to get counted in total listings. The median days on market for a San Diego County home was about 14 days in January, compared to 35 days at the same time last year.

Local buyers have even faced extra competition lately from Orange County buyers, who see the northern parts of San Diego as a better deal. Many buyers are having their offers rejected - despite going over the asking price on all of them. Some homes in the median price range are going for up to $50,000 over asking.

Mortgage rates remained near historic lows in January. The interest rate for a 30-year, fixed-rate mortgage was 2.74%, according to Freddie Mac, down from 3.62% the year before. The rate is up slightly from December’s average of 2.68%, which was the lowest in records going back to 1971.

Here is how the different home types fared:

• Single-family resale: A median of $710,000, down from a record high of $730,000 in October. There were 1,625 sales.
  
• Resale condos: A median of $480,000, down from the record high of $485,000 in September. There were 842 sales.
  
• Newly built: A median of $734,500 with 180 sales. The median hit a record $812,500 in October 2018 when there was an increase in luxury, single-family homes for sale.
  

Median home prices were up 13% for the year across the six-county Southern California region. Riverside County had the biggest increase at 17.1 percent for a median of $455,364.

It was followed by Los Angeles County, up 12.6% for a median of $690,000; San Bernardino County, up 11.8% for a median of $402,500; Ventura County, up 11.2% for a median of $655,000; San Diego County with the 9.4% increase; and Orange County, up 6.7% for a median of $799,000

Source: SDuniontribune by Phillip Molnar