Buoyed by a strong job market and rising incomes, San Diego home prices are on the rise. Home values in San Diego have nearly doubled over the last 16 years, making it the third-fastest increase in the United States behind Los Angeles and San Francisco. While that may be good news for homeowners, it couldn’t be worse for prospective homebuyers. A big reason behind the increase in San Diego's home values is the stagnant rate of new construction of single-family homes due to more people looking to rent than buy. Considered one of the best places in the country to live for its weather and low-key persona, San Diego is one of the most expensive, and this is keeping a lid on the homeownership rate, which is below the state’s average. The near future is not as bright for homebuyers, as current trends are expected to continue through 2020.

Five-Year Market Trend

San Diego home sales have been flat since 2010. However, 2015 marked the first year of full job recovery since the Great Recession, which, along with lower mortgage rates, helped the market to a 12% gain in sales over 2014. Industry experts expect the strength to continue in 2016, tailing off again in 2017. As the job market continues to strengthen, lifting incomes along the way, sales volume should pick up in 2018 and continue for several years.

As of April 6, 2016, the median sales price for homes in San Diego was $534,600, a 5.1% change over 2014. Home values were at their lowest in 2012 when the median price hit $376,000, but have risen at the most rapid rate in the country ever since. The forecast is for further increases as construction remains flat and incomes continue to rise.

Property and Transfer Taxes

San Diego collected $5.368 billion in property taxes in 2015, up from $5.073 in 2014. The increase is attributed to an improving economy, rising home values and a net increase in homeownership. The average property tax bill in 2015 was $5,450. In San Diego, a property tax bill includes Mello-Roos special taxes, school bond payments, mosquito abatement fees, rate abatement fees and other government levies. More than 40% goes to schools. Transfer rates on the sales of property are levied from the city and county of San Diego, with each charging 55 cents per $1,000 of property value.

Most Expensive Neighborhoods

La Jolla Shores has been dubbed the “Jewel by the Sea” for its breathtaking coastline, spectacular views and sparkling million-dollar homes dotting the hillside. In 2016, the median home price was $1.3 million, which is higher than 99.3% of the neighborhoods in the U.S.

Via Cuesta Verde, located near the coast, north of La Jolla and south of Del Mar, has been described as the ideal, family-friendly neighborhood for the wealthy. The extravagant homes are built on large lots that can accommodate swimming pools and tennis courts. In 2016, the median home price was $1.3 million.

Muirlands is located up the hill just north of La Jolla Shores. Medium- and large-sized homes are nestled among scenic snaking streets overlooking the Pacific Ocean. The neighborhood is culturally diverse, consisting of wealthy executives and retirees. The median home price is $2.1 million, making the neighborhood one of the most expensive in the country.

Top Real Estate Websites

SDLookup.com and HomeSalesSanDiego.com are the top two real estate websites in Google (NASDAQ: GOOG) search results. Both websites are well-organized and are chock-full of resources including real-time data on home prices and market trends. SanDiegoUnionTribune.com is an excellent non-realtor website that includes home buying and selling resources as well as current news and events for the real estate market.

San Francisco Real Estate Market

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