The median price for homes in San Diego County hit $498,000 in August, the highest point in a decade.
Analysts predict that the median, which has been steadily rising since 2008, may even rise above the the 2005 record breaking high of $517,500.
The numbers show a strong growth from the Great Recession low that dipped below $300,000.
Home prices have been rising in the county for most of the year, with new homes selling for a median $684,500, a 5.6 percent increase in the past year. Resale homes sold for a median $550,000 and resale condos sold for a median $377,750 in August.
Rent rates have made a similar spike in the area. The average cost of rent has gone up 8 percent since March of this year, according to MarketPointe Realty Advisors. The average rent reached $1,743 in August this year, a 33 percent increase from 2010 rates.
Part of the cause appears to be a lack of new construction. San Diego County has critically low home building taking place, according to the National Association of Realtors in a study the organization released Monday.
The study estimated that San Diego County would need at least 55,825 building permits for new homes approved in order to sufficiently alleviate demand, with move people moving homes for better job opportunities in the area.
Lawrence Yun, chief economist for the NRA, said construction has steeply dropped off since the recession.
Inadequate single-family home construction since the Great Recession has had a detrimental impact on the housing market by accelerating price growth and making it very difficult for prospective buyers to find an affordable home – especially young adults, he said.
Without the expected pick-up in building as job gains rose in recent years, new and existing inventory has shrunk, prices have shot up and affordability has eroded despite mortgage rates at or near historic lows.
The study compared job growth to permit dispersion. Typically a healthy developing area will average 1.6 new jobs per building permit. In San Diego, however, there are 3.4 new jobs per approved building permit, creating a much greater crunch in demand versus supply.
