Home Values Rise Even as Median Prices Fall
Recent headlines have been buzzing about the median asking price of homes dropping compared to last year, sparking plenty of confusion. As a buyer or seller in North County San Diego, it’s easy to assume this means prices are falling. But here’s the catch: those numbers don’t tell the full story. Nationally, home values are actually rising, even if the median price is down a bit. Let’s break down what’s really happening so you can make sense of the market without getting caught up in the fear the headlines create. Homes on the Market Right Now Are Smaller The biggest reason for the dip in median price is the size of homes being sold. The median price reflects the middle point of all the homes for sale at any given time. And that’ll be affected by the mix of homes on the market. To show you how this works, here’s a simple explanation of a median (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median (the middle one) is 10 cents. If you have two nickels and one dime, the median is now five cents. In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change. The same is true for housing. Right now, there’s a greater number of smaller, less expensive homes on the market, and that’s bringing the overall median price down. But that doesn’t mean home values are declining. As Danielle Hale, Chief Economist at Realtor.com, explains: “The share of inventory of smaller and more affordable homes has grown, which helps hold down the median price even as per-square-foot prices grow further.” And here’s the data to prove it. Price Per Square Foot Is Still Rising One of the best ways to measure home values is by looking at the price per square foot. That’s because it shows how much you're paying for the space inside the home. The median asking price doesn't take into account the size of different homes, so it may not always reflect the true value. And the latest national price per square foot data shows home values are still increasing, even though the median asking price has dropped (see graph below). As Ralph McLaughlin, Senior Economist at Realtor.com, explains: “When a change in the mix of inventory toward smaller homes is accounted for, the typical home listed this year has increased in asking price compared with last year.” This means that while smaller homes are affecting the median price, the average home’s value is still rising. According to the Federal Housing Finance Agency (FHFA): “Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.” So, while headlines may make it sound like prices are crashing, you don’t have to worry. With a closer look and more reliable data, you can see that prices are still climbing nationally. It’s important to remember that home prices can vary significantly by region. While national trends offer a broad perspective, local markets, like North County San Diego, may be experiencing different conditions. That’s where Shafran Realty Group comes in. As trusted local experts, we can provide you with real-time insights on what’s truly happening in your area, helping you make informed decisions in today’s market. Bottom Line The decrease in median asking price doesn’t necessarily mean home values are dropping. Instead, it reflects a shift toward smaller, more affordable homes hitting the market. A better measure of true market value is the price per square foot, which continues to rise. In North County San Diego, this trend holds true. If you’re curious about how home prices are moving in our area, the Shafran Realty Group is here to provide expert guidance and answer any questions you may have. Feel free to reach out!
This Is the Sweet Spot Homebuyers Have Been Waiting For
After months of sitting on the sidelines due to high mortgage rates and affordability challenges, many homebuyers in North County, San Diego, are finally seeing an opportunity to step back into the market. With mortgage rates trending downward, today’s market is creating a sweet spot for buyers—and it might not last long. At Shafran Realty Group, we understand the local market dynamics and are here to help you navigate this window of opportunity. If you’ve put your home-buying plans on hold, now might be the perfect time to make your move! As you weigh your options and decide if you should buy now or wait, ask yourself this: What do you think everyone else is going to do? The truth is, if mortgage rates continue to ease, as experts project, more buyers will jump back into the market. A survey from Bankrate shows over half of homeowners would be motivated to buy this year if rates drop below 6% (see graph below): With rates already in the low 6% range, we’re not terribly far off from hitting that threshold. The bottom line is, that when they drop into the 5s, the number of buyers in the market is going to go up – and that means more competition for you. That increased demand will likely push home prices up, which could potentially take away from some of the benefits you'd gain from a slightly lower interest rate. As Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), explains: “The downside of increased demand is that it puts upward pressure on home prices as multiple buyers compete for a limited number of homes. In markets with ongoing housing shortages, this price increase can offset some of the affordability gains from lower mortgage rates.” So, while waiting to buy may seem like a smart move, it could backfire if rising prices outpace your savings from slightly lower rates. What This Means for You Right now, buyers in North County, San Diego have a unique chance to get ahead. The current market is a buyer’s sweet spot—why? Because many others are still waiting on the sidelines, leaving you with less competition. With fewer people actively searching for homes, this is your opportunity to find the perfect property. Plus, affordability has improved significantly, thanks to recent drops in mortgage rates, making homeownership in North County more accessible than it’s been in months. As Mike Simonsen, Founder of Altos Research, says: “Mortgage payments on the typical-price home are 7% lower than last year and are 13% lower than the peak in May 2024.” And while the supply of homes for sale is still low, it's also higher than it’s been in years. According to Ralph McLaughlin, Senior Economist at Realtor.com: “The number of homes actively for sale continues to be elevated compared with last year, growing by 35.8%, a 10th straight month of growth, and now sits at the highest since May 2020.” This means you now have more options to choose from than you’ve had in quite a while. With fewer buyers in the market, improving affordability, and more homes to choose from, you have the chance to find the right one before the competition heats up. Why Waiting Could Cost You If you’re waiting for the perfect time to buy, it’s important to understand that timing the market is nearly impossible. The longer you wait, the higher the risk that market conditions will shift—and not necessarily in your favor. As Greg McBride, Chief Financial Analyst at Bankrate, says: “It’s one of those things where you should be careful what you wish for. A further drop in mortgage rates could bring a surge of demand that makes it tougher to actually buy a house.” Bottom Line Don’t wait until you’re facing more competition and higher prices—right now, you have the perfect opportunity to buy a home while the market is in a sweet spot. In North County, San Diego, conditions are ideal for buyers, and Shafran Realty Group is here to help you take full advantage. Let’s connect today to ensure you don’t miss out on this prime moment to secure your dream home.
The #1 Benefit of Lower Mortgage Rates
Remember when you paused your home search due to rising mortgage rates? Well, now might be the perfect time to revisit your plans. With interest rates on the decline, you could potentially save thousands of dollars on your monthly mortgage payments. Imagine the financial freedom and peace of mind that comes with a lower mortgage. Don't miss out on this opportunity to turn your homeownership dreams into reality. Even a small drop in interest rates can make a big difference in your purchasing power. Our team has created some visual aids to help you understand exactly how much you could save. If you put your search on hold when mortgage rates were higher, consider how much you could save now that rates are coming down.Bottomline Time is of the essence! With mortgage rates falling rapidly in North County San Diego, now is the perfect time to secure your dream home. Shafran Real Estate Group offers exclusive access to the latest listings and expert guidance to help you maximize your savings. Don't miss out on this limited-time opportunity. Contact us today to schedule a consultation and start your homeownership journey.
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