In the third quarter of 2024, the U.S. housing market experienced notable fluctuations, shaped by rising mortgage rates and increasing home prices. Sales of new residential homes saw both declines and rebounds during this period, while inventory levels continued to expand significantly across all segments.
On September 18th, the Federal Reserve Bank dropped its benchmark rate for the first time since 2020 which gave both homebuyers and sellers a boost of confidence. Inflation has fallen to its lowest reading since early 2021, and mortgage rates were the lowest since February 2023. Stock markets have been volatile since mid-July, but the S&P 500 & Dow hit new highs on September 19th.
- National sales activity was relatively weak in August 2024: Existing-home sales declined 3.1% from July and 5.7% from August 2023. But sales in August mostly reflect offers accepted in July before many of the positive economic developments mentioned above.
- Year over year, the median single-family-home sales price and the median condo/co-op price in August were up 2.9% and 3.5% respectively: Both have declined from all-time highs hit in June, which is a typical seasonal trend.
- The number of active listings continued to climb, rising 23% from August 2023 to the highest count since Autumn 2020. Price reductions on active listings rose 37% year-over-year. These statistics reflect significant 2024 changes in market supply and demand dynamics.
- Approximately 60% of sales went into contract in less than 1 month (vs. 72% in August 2023), 20% sold over list price (vs. 31% last August), and 26% were purchased all-cash (vs. 27%). The median days-on-market to acceptance of offer was 26 days (vs. 20 days last year), and sold listings received an average of 2.4 offers (vs. 3.2). 26% of buyers were purchasing their first home; 7% of homes bought were intended for vacation use; and 8% of buyers purchased without seeing the property in person. Distressed-property sales made up only 1% of sales.
- Approximately 18% of August buyers waived their inspection contingency, and 20% waived the appraisal contingency. 14% of June-August contracts saw delays in scheduled close of escrow, and 5% of contracts were terminated before completion of sale.
In San Diego, pending sales exhibited a gradual slowdown over the quarter. July saw a 3.7% decrease in pending sales year-over-year, followed by a 0.5% drop in August, and a 1.5% decline by September. The price range showing the most growth in sales was consistently the $2,000,001 to $5,000,000 range, where sales increased by 23.2% in July and rose further to 30.6% by September.
The median sales price for detached homes went up by 2.8%, reaching $1,159,000, while attached homes saw a small decrease of 0.5%, bringing the price to $720,000. Homes were staying on the market longer, with detached homes seeing a 9.1% increase in days on the market and attached homes seeing a 41.2% jump. The supply of homes also increased, rising by 18.2% for detached homes and 33.3% for attached homes.
Overall, the third quarter of 2024 highlighted the dynamic nature of both the national and San Diego housing markets. Economic improvements, like the Federal Reserve’s rate cut and easing inflation, provided a much-needed boost, though the market remains sensitive to broader economic shifts. As inventory grows and market conditions stabilize, we’ll be closely watching how these factors influence the final quarter of the year and set the stage for 2025.
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