San Diego County’s median home price hit an all-time high of $594,455, pushed up by declining inventory and dropping interest rates.

Like much of Southern California, the county has seen sales increase as mortgage interest rates started dropping in the spring and competition heated up. The previous high in the county was $590,000 in June, according to CoreLogic data provided by DQNews.

The median home price has increased 5.2 percent in a year, a turnaround from a few months ago when prices were down year-over-year by 1 percent. With 3,180 closed transactions in November, sales were up 8.6 percent from the same time last year when interest rates were much higher.

The interest rate for a 30-year, fixed-rate mortgage was 3.7 percent in November, said Freddie Mac, down from 4.87 percent at the same time last year.

As interest rates dropped, sales significantly increased — which led to a shrinking supply of available homes. In November, there were 5,541 homes for sale, said the Greater San Diego Association of Realtors, down from 7,445 at the same time last year.

The problem is not isolated to Southern California, with inventory numbers down across the United States.

The National Association of Realtors said existing-home sales had declined by 1.7 percent in November as buyers have less to chose from.

“The new home construction seems to be coming to the market, but we are still not seeing the amount of construction needed to solve the housing shortage,” NAR chief economist Lawrence Yun said in an analysis. “It is time for builders to be innovative and creative, possibly incorporating more factory-made modules to make houses affordable rather than building homes all on-site.”

Building permits for San Diego County show in the first nine months of 2019 that 6,491 homes had been built or started construction, down 24 percent from the same time last year.

Across Southern California, the median home price was up 5.6 percent annually to $549,000. The biggest increase was in San Bernardino County, up 6.1 percent for a median of $350,000.

It was followed by San Diego County with the 5.2 percent increase; Riverside County up 5 percent for a median of $409,500; Los Angeles County up 4.2 percent for a median of $625,000; Orange County up 2.5 percent for a median of $735,500; and Ventura County up 0.9 percent to a median of $580,000.

Source: SDuniontribune by Phillip Molnar