San Diego is one of the country's toughest markets to buy a starter home
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Most San Diego County families can't afford to buy a starter home in the area.
Why it matters: Low supply and high housing costs make it difficult for this generation of potential homeowners to get their foot in the door and build wealth through real estate.
Driving the news: Less than 1% of San Diego starter-home listings are affordable for middle-income households, according to Redfin's latest analysis.
Zoom in: House shoppers in August needed a $192,207 annual income, up 0.8% from a year earlier, to afford the metro area's typical starter home — which cost $653,000, per Redfin.
- San Diego County's median household income is $108,206 this year, researchers estimate.
- So, a typical household would need to spend more than half of its income to buy a median-priced home.
State of play: Local inventory continues to rise. Home sales dropped in September as prices fluctuated some but stayed elevated overall, according to a report by the Greater San Diego Association of Realtors.
- Resale properties are sitting on the market longer than last year, closing escrow in an average of 34 days compared to 25 days in 2023.
Follow the money: The median sales price for a single-family home was just over $1 million in September, a nearly 6% increase from 2023 and 0.1% drop from August.
- Median prices for condos and townhomes were $646,000, a decline of 4.4% month over month and 2% year over year.
- Collectively, home prices were about 5% higher than last September, per SDAR.
The big picture: Nationally, buying a starter home is now cheaper than it was a year ago — the first annual decline since 2020.
Reality check: "Starter homes aren't what they used to be. A decade ago, a turnkey four-bedroom house in a nice neighborhood was often considered a starter home, but today, a small fixer-upper condo is often all a first-time homebuyer can afford," Redfin senior economist Elijah de la Campa said in the analysis.
Catch up quick: Mortgage rates are down, offering homebuyers some relief, but a shortage of available houses is keeping prices high.
- Attracting first-timers is one reason why homebuilders are churning out smaller, less expensive houses.
What we're watching: Many voters in San Diego and nationwide say home affordability is a top concern.
- Former President Trump and Vice President Kamala Harris have different proposals for tackling it.
Axios' Sami Sparber and Erin Davis contributed to this reporting.