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Is it a buyer or sellers market in San Diego? Monthly San Diego Housing Market Update
Landing a California home is hard and expensive – especially in San Diego. Last month home prices jumped up again making the median price for a single family home over $1,000,000. Despite mortgage rates not dropping as quickly as expected, home buyers are still in the market in San Diego.
Continued lack of inventory is the key factor in high home prices throughout San Diego. Home builders are building more homes, but less single family and more attached homes. This continues to make San Diego a sellers market with many homes listed for sale receiving multiple offers.
San Diego Median Prices
San Diego County rose 11.2% year over year from $925,000 to $1,029,000. The biggest jump in median prices was South County San Diego with an 18% gain in median home prices year over year.
Asking Price vs. Sold Price
The current List to Sale price is close to or above 100%. This means that home sellers are getting at or above asking price for their homes. This is why it is critical to write a strategic offer when you are buying a home in San Diego.
Mortgage Interest Rates
he San Diego housing market is also impacted by the country's mortgage interest rates. As they are rising, many people don't want to buy properties.
According to Redfin's latest reports, this was the national average APR on May 3 of this year:
7.011% for a 30-year fixed-rate mortgage after an 11% rise in the last seven days
6.228% for a 15-year fixed-rate loan after a 15% rise in the last seven days
6.095% for a 5-year Adjustable Rate Mortgage (RAM) after a 12% rise in the last seven days
Will the San Diego Housing Market Crash Soon?
Many potential buyers are also concerned about the country's economic situation, as experts expect a slowdown in the real estate market.
As a result, many people think that the San Diego housing market could crash soon, posing risks to their real estate investments.
However, as mentioned, analysts predict that the real estate market will experience a slowdown. In fact, most claim that it won't be similar to the Great Recession although major changes are expected.
Additionally, other facts and trends show that the San Diego housing market is not likely to crash this year. These are:
Growing Demand
Both in San Diego County and in other parts of the city, the home and rental market remains competitive, as they're attractive destinations for potential homebuyers.
The more people move to San Diego, CA, the higher the housing demand. Experts have seen this trend across different demographics.
Millennials in their prime buying years believe San Diego is a great place to find the perfect home. In addition, Hispanics who move to the country also consider purchasing resident properties in this city.
Low Supply of Newly Constructed Homes
Analysts expect housing inventory to remain low due to a lack of newly constructed homes.
According to experts, the supply of newly built houses must return to pre-2007 levels to have a significant impact on the city's inventory.
However, the home inventory has remained very low in recent months. Many believe that low supply results from high demand. In addition, fewer people are willing to seek regulatory approval to buy land and build more properties.
Low Inventory
As mentioned, the housing supply in San Diego has remained quite low since last year despite having risen slightly in recent months.
In any city, the housing market is at risk of a crash when the demand is low because there are almost no homebuyers and the supply is excessively high.
However, in San Diego, homebuyers are still actively searching for residential properties. In addition, there's still strong demand and low supply.
Will more home owners sell their home in San Diego this year?
More than 80% of surveyed potential sellers have been considering a home sale for between 1 and 3 years, with the average length of consideration falling at roughly 2 years. Meanwhile, recent seller sentiment suggests that most recent sellers (79%) wish they had listed their home sooner and feel they could have taken advantage of a hotter housing market.
According to realtor.com 79% of potential sellers feel locked in to their home due to a low interest rate. Though the share of “locked-in” owners is 3 percentage points lower than last year, today’s mortgage rates are taking a toll on seller sentiment. About 29% of “locked-in” prospective sellers need to sell soon for personal reasons, and 50% plan to wait for lower rates.
