The San Diego County median home price hit $525,000 in April, passing the region's previous peak reached in 2005, real estate tracker CoreLogic reported Tuesday.
High demand and tight supply appear to have pushed the price beyond previous milestones. There were 3,618 homes sold in April — the lowest for that month since 2012.
Supply is dwindling, too. In April, there were 4,763 active home listings in San Diego County, said the Greater San Diego Association of Realtors. That is down from 5,754 listings the same time last year and the 6,386 in 2015.
When adjusted for inflation, the nominal November 2005 peak of $517,500 would be roughly $644,500 in 2016 dollars. Still, the San Diego median price is noteworthy for increasing 7.4 percent in a year and outpacing most of Southern California.
Housing bubble fears are likely with the new median but home prices would have to rise 40 percent (assuming no income or rent growth) to be as overvalued as much as they were during the last peak, said Rich Toscano, who predicted the last housing crash on his blog Professor Piggington's Econo-Almanac.
"Homes are definitely expensive when you compare purchase prices to rents and incomes," he said. "They are the most expensive they've been outside the bubble. But, it still doesn't compare to the expensiveness of the bubble."
Toscano said low interest rates are keeping the monthly mortgage rates somewhat affordable and home valuations high.
"In theory, for as long as low rates persist, they could keep supporting the prices," he said. "The big question is if that will continue to happen and the smartest people in the world disagree on that."
There were 2,306 resale homes sold in April, bringing the median home price to $575,000, a new peak surpassing the previous record of $574,000 set in May 2006. The resale condo price was $385,000 with 1,108 sales — still $15,000 away from the peak set in April 2005.
Resale homes had the largest year-over-year price increase with a 7.5 percent appreciation. Resale condos were up 4.1 percent and newly built homes up 1.1 percent.
The newly built home median price in April was $622,000 with 204 sales.
Dana Kuhn, real estate lecturer at San Diego State University, noted the median home price was still roughly $120,000 short of the last peak when adjusted for inflation, and that's probably a good thing.
"Is there room for (price) growth longer term? I hope not," he said. "To be 23 percent lower than the inflation-adjusted peak is really good news. Because we know what happened last time we hit that number."
How far prices could continue to rise is unclear, but any drastic increases by the end of the year are not predicted by most experts. Kuhn said the San Diego market was already "at the edge of affordability" for income levels and housing costs.
Homebuying in this market can be stressful for buyers who are seeing multiple offers on almost any home for sale, said real estate agent Hunter Gammill. The market for sellers is much different. His firm, Reef Point Real Estate, guarantees it will sell the home or buy it themselves.
Gammill said buyers need to be ready at a moment's notice so it helps to have a real estate agent who works nights and weekends (usually not hard to find) but also a lender that keeps similar hours.
The number of absentee buyers, usually investors who don't intend to live in the home they purchase, has held mostly steady for the last year. Absentee buyers made up 19 percent of sales in April, down from 19.7 percent at the same time last year. In early 2013, more than 30 percent of sales went to absentee buyers.
For all of Southern California, the median home price was up 6.2 percent year-over-year, bringing the median to $485,000. The largest increase was in San Bernardino County, at 9.1 percent, to a median price of $300,000.
It was followed by Riverside County with a 7.9 percent increase for a median of $356,000; San Diego County with a 7.4 percent increase; Los Angeles County with a 5.8 percent increase for a median of $550,000; Ventura County with a 5.5 percent increase for a median of $560,000; and Orange County with a 4.7 percent increase for a median of $675,000.
Tribune Content Agency