REGION — Home values in North County San Diego fell over the past year, according to a new report from SmartAsset, but prices are rising again due to a shortage of properties on the housing market.
North County is home to five of the top 100 most expensive housing markets in the U.S., including Carlsbad (15th), San Marcos (49th), Vista (64th), Oceanside (67th) and Escondido (69th), said Ray Marek, a public relations manager for SmartAsset.
Between May 2022 and May 2023, Carlsbad saw a 3.45% drop in housing prices, followed by Vista (3.55%), Oceanside (3.81%), Escondido (4.75%) and San Marcos (5.74%), the report shows.
“Carlsbad leads the pack as the 15th most expensive housing market in the entire nation — with a typical home value of more than $1.3 million as of May 2023,” Marek said. “The second most expensive housing market in the area is San Marcos, where the typical home value is just under $885,000.”
But home values have fallen in cities across the Golden State and some places far more dramatically than North County, such as the 12.82% drop in Palo Alto. While Carlsbad had the largest drop in home prices, the city’s average listing is nearly $500,000 more than in San Marcos.
However, Bill Richard, president of the North San Diego County Realtors and a broker, said despite the Smart Asset report, June and early July have seen a rebound in the market and significant gains in some areas.
Richard acknowledged the market had slowed, as reported by SmartAsset, but the industry and prices are spiking again due to a severe lack of inventory — the number of listings has dropped from more than 22,000 in 2013 to about 1,800 this year.
“There is such a lack of inventory that it’s driving up prices beyond what anyone could expect,” Richard said. “There is nothing on the market, and everything available is hyperinflated. Those who cashed out with their $4 or $5 million homes are coming down here and purchasing in all these area. We have a shortage of millions of homes. That’s just causing the prices to go up.”
Recently, Richard assisted a client with a Temecula area home valued at $800,000 last year. The homeowner sold the home in 2023 for $1.2 million in cash.
High mortgage rates and borrowing costs combined with a housing shortage continue to pose a significant obstacle to prospective homebuyers. But if interest rates drop below 7%, buyers will reemerge to check out the market, Richard said.
While the SmartAsset report only studied cities with a population of more than 65,000, SmartAsset did review smaller coastal cities like Del Mar, Encinitas and Solana Beach, each experiencing a small decline in home values since last year.
Median home prices in Del Mar in May 2023 were $3,510,358 compared to $3,602,823 in May 2022. In Encinitas, the May price was $1,692,370 compared to $1,766,207 in 2022 and Solana Beach prices were $1,926,110 in May and $1,971,567 in 2022.
San Diego is the 47th most expensive housing market in the country but the third highest in the nation for average rent at $3,175, per Zillow’s June report, overtaking San Francisco ($3,168) for the first time but trailing San Jose ($3,411) and New York City ($3,405).
