Southern California home sales, including those in San Diego County, hit one of the lowest levels ever last month, according to a new report from CoreLogic.
The organization's chief economist Selma Hepp said mortgage rates continue to hurt purchasing power.
“Home sales activity has been on decline since summer of last year, ever since mortgage rates started increasing. And now we have hit the lowest point in 15 years in terms of home sales activity,” Hepp said.
Zillow data painted a similar picture, with home sales for September being the lowest in at least 15 years.
Zillow spokesperson Matt Kreamer attributed the slow-down to “typical seasonality and the rate-lock effect, which is making for very limited inventory and continuing affordability challenges.”
San Diego real estate agent Voltaire Lepe said he and other agents have been feeling the pinch, especially over the last few months.
“I've been in real estate for 20-plus years. This is probably the hardest year that I've gone through,” he said.
Lepe’s sales are down about 50%.
“The current state of the housing market today, I would say, is on a downward trend as far as less sales. And I believe prices are also going to drop, or are dropping right now slightly, because demand is down,” he said.
Despite the difficult housing market, San Diego County recorded its highest-ever priced home sale last week — an oceanfront Del Mar property that went for $44.1 million.
Lepe said for ultra wealthy buyers, interest rates often don't make or break a decision.
“When you have a cash buyer, they don't care if the interest rate is 8% versus 6%, compared to a lot of my clients who are payments sensitive,” he said. “6% rate to 8% rate is a huge difference in their monthly payments and it's a big percent of their monthly income.”
CoreLogic’s Hepp said a lack of overall housing supply may keep prices close to their current levels for the foreseeable future.
She said that makes the housing market tough for lower-income renters and potential first-time homebuyers.
“While we still do have demand, there's still a lot of people that are being completely priced out of the market,” the economist said.
The average cost of a 30-year home mortgage is now 7.79% according to Freddie Mac — the highest it's been since 2000.
