Local spotlight: San Diego homebuyer trends

As prospective homebuyers across San Diego, one of Open Listings' biggest markets, step up their home search in 2018, we wanted to take a look at trends around homes for sale in San Diego so we could help prospects know what they should expect to encounter in this year's house hunt.

To do so, we analyzed data on the Open Listings platform from more than 17,000 home sales across the greater San Diego area and its surrounding communities over the last year.

Despite being the nation’s eighth biggest metro area, San Diego is really made up of sprawling suburban areas that are all very different, makes house hunt struggle very real.

  • Where should homebuyers expect to find the most housing inventory?
  • Are there best months to buy?
  • Which neighborhoods are more likely to cause bidding wars?
  • And most importantly, where are the potential deals at?

Let’s dive into our findings:

The most popular time to buy remains in the Summer while Winter stays cool

Similar to trends we recently saw in the Los Angeles housing market, last year's San Diego home sales peaked in June with 1,888 closings.

Summer is peak home buying season. While there tends to be the most inventory on the market, it's also a time where buyers are competing with other buyers. Therefore, in June, you’re also likely to see the highest prices for homes in San Diego.

January of last year was the slowest month for San Diego home sales, as buyers and sellers took their time coming out of holiday doldrums. That trend typically occurs seasonally each year with listings and sales then picking up throughout the spring before peaking in the summer.

Outside of June, May (1,809) and August (1,788) were the next busiest months for homebuyers in San Diego over the last twelve months. Again, this sticks along the lines of national trends as things usually slow down a bit in July with the 4th and surrounding Summer vacations.


Lots of local housing inventory, lots of sales

Now, let’s take a look at which communities or neighborhoods were the busiest for homebuyers in the San Diego Area. These are the areas where you are most likely to see properties change hands the most. The space at the top of our list is dominated by northeastern San Diego. Given San Diego’s geography, the bulk of the area’s housing inventory is located here.

Throughout the last year 922 homes were sold in Rancho Bernardo/Carmel Mountain Ranch. While it’s not surprising that so many buyers are pushing further to the northeastern corner of the San Diego area to find affordable housing ($540,000 median sale price) and great schools, it isn’t helping the commute for the growing number of residents driving daily into downtown San Diego on I-15.

Since 2013, traffic on the road has increased 6% due to more residents buying homes here, and even further to the north and west and commuting to the city.

The issue is also impacting residents just a bit further north in 4S Ranch, which was the second busiest homebuyer market last year. While homes were a bit more expensive here ($860,944), there were still 827 houses sold. The planned housing community 25 miles north of downtown San Diego still offers a lot of buying opportunities, but those commuting into the city during rush hour from here can often be faced with spending nearly 2 hours on the road each day.

The third most active San Diego area homebuyer market over the last twelve month was even further north and to the southside of Oceanside. Tri-City, made up of the aforementioned South Oceanside, North Carlsbad and West Vista saw 811 home sales during that period.

With Camp Pendleton nearby, many residents here are actually commuting north to the Marine Corps base rather than driving into downtown San Diego each day.

In addition, the direct south has become a new hot spot for technology companies and startups, leaving those with backgrounds in the innovation economy to find career opportunities locally. Plus, by California standards, housing for middle-class families in this area is fairly affordable with a median sale price over the last year of $495,000.

This is a big discount over even buying in Carlsbad ($825,00), or next door in Bressi Ranch ($811,000), which also made our list of top five busiest housing markets.

However, neither of these communities made our list of the most expensive areas to buy a home in San Diego.

Here are the communities that did:


Luxe living in La Jolla or Del Mar?

From the busiest markets around the San Diego area, we head to the priciest places to buy homes over the last twelve months.

Topping the list was the Del Mar area with a median sale price locally of $1,585,000. It’s not uncommon for luxury property sales nearby to hit eight-figures. Some current listings in the area are going for close to $6M and close to $7M.

Just a bit south and on the other side of Torrey Pines, La Jolla is equally expensive.

In fact, before the great urban real estate land rush that pushed housing costs in urban areas like San Francisco, New York City and Los Angeles to astronomical prices, La Jolla was always on the list of most expensive housing markets in the country.

While La Jolla no longer makes those national lists of the most expensive places to live across the country, the seaside town a half hour north of San Diego is still one of the areas most expensive zip codes.

Last year, the 692 homes in La Jolla fetched a median sale price of $1,200,000. That makes La Jolla and Del Mar the only San Diego areas we analyzed with median home sales over the one million dollar mark through the last year.

Carmel Valley, another planned suburban community to the north of San Diego and east of Del Mar, was the next priciest area with 689 home sales coming to a median home sale price of $976,900 in the last year.

Pushing that median sale price up over the last twelve months was the opening of a new 20 home luxury community, which quickly sold out.


Where buyer bids are blowing up

Now, we transition to the most competitive markets that buyers are likely to find in the San Diego area.

The vast majority of San Diego, like many areas surrounding major cities, is a seller’s market. Most buyers are paying nearly the asking price for homes. That means that you’ll likely find a competing bidder in nearly any area you look to buy and you need to be ready to purchase.

To find out what are truly the most competitive San Diego homebuyer markets we took the areas with the lowest median days on market and then used the percentage difference between the final sale price and the listing price as the ‘tiebreaker’.

Topping our list was Rancho Peñasquitos. Homebuyers certainly are lining up to live alongside these "little cliffs." Over the last twelve months, homes have only stayed on the market a median of 7 days. Furthermore, sales are typically going for only .20% under the listing price in the area on average.

What makes Rancho Peñasquitos so attractive? For one, you can get a home in the area far under the price you would pay just to the west in Carmel Valley. Median sales went for $705,000 over the last year.

Furthermore, the area attracts families on the look for new homes with many quiet cul-de-sacs and recently developed housing communities. Combine that with highly rated local schools and home prices being in the $600-$700K sweet spot, and it becomes a very competitive market for affluent families looking for a home to settle down in.

Next on the list was Mission Valley. With 100+ less properties changing hands in Mission Valley than in Rancho Peñasquitos, there is less inventory in the area. But, the big difference is in the sale prices.
With most available properties in Mission Valley ($342,500) being condominiums and apartments, it was one of only two San Diego areas we analyzed that had median sale prices in the $300,000’s. That makes it one of the few areas lower-income households are looking at when they attempt to move from renting a place to buying a place.

The good news for those looking to live in the area is that Mission Valley is planning to triple the number of housing units available over the next few decades.

To round out the top three most competitive markets, we just need to head a bit to the north and west of the border of Mission Valley, and into the area of Clairemont Mesa East ($490,000). Similar to Mission Valley, low inventory and a large percentage of condos has continually kept market demand high in this area.


Oceanfront deals to be had?

Planning to buy in 2018?

If you have an eye for ocean views and the pocket for it, you may be able to find a deal on the northern coast of the greater San Diego area. These areas dominated the top of our list of areas where buyers were closing for the biggest percentage under listing price.

The highest priced markets we analyzed also topped this list, which means there may be deals to be had for luxury buyers. Despite homes going for well over a million in the Del Mar and La Jolla areas, final sales were 3.77% and 3.16% respectively under the asking price on average.

It’s worth noting that with high priced luxury homes, the difference between what a seller is looking for versus what a buyer is willing to pay is most often measured in hundreds of thousands of dollars versus tens of thousands of dollars. This leeway can lead to sometimes paying a good deal under asking price.

Oceanside, the coastal community near Camp Pendleton, came in third on the list with sales in the area coming in at 2.38% under the asking price on average. With median home sales in this area coming in at nearly half of the top two markets ($649,900), this could be a seaside place to buy in 2018 for a much different, and varied, type of homebuyer.

The city is actually the third largest in San Diego County with a population over 160,000. With its military background, housing inventory can vary widely from mobile homes to newly developed, multi-million-dollar, beachfront properties.

A bonus place to look for an oceanfront deal south of $1M prices? Skip south past Carlsbad, and you get to to the fourth area where there may be a deal to be had for buyers.

However, in Encinitas, these "deals" are for those that have housing budgets in the $900,000 range. There were 632 home sales in the area over the last year with a median sale price of $956,250. But, at least final sales were still 2.21% below the asking price.

On the hunt for a house in San Diego? Use Open Listings' free site to find matches the moment they hit the market. Plus, save thousands when you buy with us.