The San Diego housing market wasn’t just hot in 2017, it was record-breaking.

According to The San Diego Union-Tribune, via a report by CoreLogic, 2017 median home prices were $29,000 higher than the $500,000 peak in 2005 and 2006, coming in at $529,000. Though if adjusted for inflation, the median would have been $11,000 less than during the housing boom. 

Nevertheless, sales were up last year despite rising costs and fewer homes available. As the number of houses on the market declined, sales prices continued to climb while sales stayed constant.

Mark Goldman, a finance and real estate lecturer at San Diego State University, says that historically low interest rates, job growth, and low unemployment have led to rising prices. “If you look back at 2017, it was a robust year,” he told SDUT. “Interest rates were quite good, the economy was continuing to barrel ahead, wages were strong, employment was strong, and millennials were aging into the homebuying market.” 

“If you look back at 2017, it was a robust year,” Mark Goldman, finance and real estate lecturer at San Diego State University, told the North San Diego County Association of Realtors. “Interest rates were quite good, the economy was continuing to barrel ahead, wages were strong, employment was strong and millennials were aging into the homebuying market.”

The lack of inventory has been a real market driver, not just in San Diego but throughout the nation. Since the recession, builders have been scrambling to make up for the lack of construction, but have been unable to keep up with rising demand. Seen locally, between 2014 to 2017, the average number of listings in San Diego County dropped from 7,000 to 5,000. 

Last year, 42,587 homes were sold in San Diego County with an average sale taking place within 31 days. That’s the fastest turnaround in sale time since 2006, the first year the Greater San Diego Association of Realtors began keeping records. It’s easy to understand why so many homes were off the market so quickly. Less inventory created more demand which led to strong competition among buyers to up their offers. Even though there was an increase in apartment and condo construction, the desire of many to own a home remained strong in spite of prices. 

The communities with the fastest price growth throughout 2017 were Ocean Beach, Pauma Valley, Solana Beach, Spring Valley, and Logan Heights. Ocean Beach saw the largest price increase in San Diego County, up 21.9 percent from 2016, with a median price of $1,066,000 and a total of 168 sales during the year. 

Though construction for new homes was below historical averages, the market thrived on resales. Oceanside was a big winner when it came to home resales, bringing in a grand total of 1,741 last year. Other top neighborhoods in this market were Fallbrook, Escondido, and Poway. 

Cities that saw price increases greater than 40 percent were Warner Springs (62.2 percent), La Jolla (61.1), Grantville (49.9), Bonsall (41.6), and Carmel Valley (41.4). Median home prices for these five cities ranged from $345,000 to $1.2 million.