The number of home listings in San Diego County hit their highest point of the year in July.

San Diego home prices fell for a second month in July as the number of homes for sale hit its highest point of the year.

The median home price in San Diego County was $885,000, CoreLogic reported Wednesday, down $10,000 since May. The median, which combines sales for newly built homes, resale condos and resale single-family homes, was still up 4.1 percent annually.

San Diego County also fell out of the $1 million club, with its single-family home price dropping to $980,000. For two months, it was one of only two Southern California Counties, joining Orange County, with a million-dollar home median.

Mark Goldman, a real estate analyst with C2 Financial Corp., said the home price drop was likely because of an increase in home inventory.

“It’s all supply and demand,” he said. “If you are listing your home for sale, and your neighbor is listing their home for sale, it becomes a competitor to you. The more properties that are on the market, the more competition there is. That will soften the market.”

There were more homes available for shoppers in July than any point this year. Roughly 5,260 homes were listed.

Despite the added inventory, buyers will still likely need to act fast. 40.5% of homes in July were off the market in two weeks. Still, that is better than the 60 percent in January when there were very few homes for sale.

More homes on the market made for more sales. There were 2,839 home sales in July. For context, there were 1,678 home sales in January.

One thing helping buyers were steadily decreasing mortgage rates. On the last day of July, the average interest rate for a 30-year, fixed-rate mortgage was 6.78% percent, according to Freddie Mac, down from the high point of 7.22% this year in May.

Mortgage rates have continued to fall. The average rate was 6.35 percent last week, according to Freddie Mac.

Federal Reserve Chair Jerome Powell indicated last month that an interest rate cut was coming soon, which could mean lower mortgage rates. Mortgage rates follow the yields on mortgage-backed securities. These bonds typically track the yield on the U.S. 10-year Treasury.

Goldman argued the change could mean little because home prices would likely rise if more people, motivated by lower rates, are trying to get in the market. He said more competition would likely add to bidding wars.

Here’s how different home types in San Diego County fared in July:

Resale single-family: Median of $980,000 with 1,711 sales. It is down from a peak of $1,007,500 reached in May.

Resale condo: Median of $725,000 with 843 sales. It’s a new price peak, up from the previous high of $723,000 in April.

Newly built: Median of $951,000 with 141 sales. This figure combines single-family homes, townhouses and condos. It was down from a peak of $1.2 million last July, when there was an influx of newly built single-family homes, lifting the median higher.

Here’s a look at the median prices in the counties:

Los Angeles County: Flat month-over-month for a median of $890,000; up 7.9% annually.

Orange County: Down 2.5% monthly for a median of $1,180,000; up 10.3% year-over-year.

Riverside County: Up 0.9% in a month for a median of $585,000; up 6.4% in a year.

San Bernardino County: Monthly rise of 5.3% for a median of $500,000; up 6.4% annually.

San Diego County: Down 0.6% monthly to a median of $885,000; up 4.1% annually.

Source: SDuniontribune by Phillip Molnar