So what’s going on in the San Diego Real Estate Market? And more specifically the micro market that exists in 92127 and beyond? We give you the scoop.
The Numbers
Inventory is still extremely low, which is keeping prices high, even though mortgage rates have gone up again for buyers. Most anticipate the Feds implementing another 1/4 pt increase at their next meeting, which is already built into the market rates. What’s remarkable is that although rates are hovering between 6.5%-7.5%, the prices haven’t dropped and are expected to increase slightly. This shows you the power of limited supply and high demand!
Here are some stats from the recent Altos Weekly Report for San Diego.
This week the median list price for detached homes in San Diego is $1,499,000 with the market action index hovering around 73. This is about the same as last month's market action index of 73,which means it’s a “strong seller’s market”. Inventory has decreased to 388, down 33 from the week prior.
The current market shows:
21 Median DOM (days on market)
$1,198,000 Median Price New Listings
1,655 Detached homes in San Diego County actively for sale
Should I Wait to Buy?
With affordability putting a damper on buyers, it’s natural for home shoppers to want to hold off and wait. I caution you: don’t expect prices to fall even though rates keep increasing. At this point, it’s safe to conclude that the market has been able to absorb the rate increases due to the lack of inventory and high demand. As rates increase higher, fewer sellers want to sell, since 90% of Californians have mortgage rates under 5%. Thus, inventory will continue to get squeezed.
As a buyer, it’s not a good strategy to “wait” for prices to fall, as that rarely happens. If rates do decrease, you’ll have more competition to buy, and prices will increase even more. If you analyze any 10 year period of time in San Diego real estate, prices always increase. Since most buyers will own their home for 10 or more years, chances are that you’ll sell for more than you paid. Meanwhile you’ve had a nice home to raise your kids in!
This report backs up my claims in the last paragraph:
Baby Boomers to the Rescue?
Here in San Diego, we have a unique market with perpetually glorious weather (well, except for a few months this year!!). This makes it a great retirement city for baby boomers. Did you know that I own and manage a combined 10 fully furnished monthly rentals, half of which are in 55+ communities?
I rent to retirees from the cold climates during the winters (Canada, Midwest, Northeast) and from the hot climates during the summers (Arizona, Palm Springs). There is a steady stream of year-round renters inquiring about my monthly rentals.
Additionally, 65% of my team’s real estate sales were among clients who are 55+ in 2022. I share this information because we have a unique perspective when it comes to the 55+ real estate market in San Diego.
Quick trivia fact: You don’t have to be 55+ to own a 55+ property. Some folks use the strategy of buying a property before they retire, and rent it out until they’re ready to move in. This way you get the advantage of owning real estate now and lock yourself into today’s prices (which, believe me, are lower than they will be when you retire).
From a buyer/seller perspective, the 55+ segment seems to be bolstering our market with all cash offers. I think this article does a great job explaining what is happening here and the impact on Real Estate by this buyer group.
This demographic comes to vacation here to visit with their grandchildren, children, or used to live here and want to come back. Some come due to our medical facilities, as we have some top tier medical specialists that cater to this demographic. They all, however, love our climate, and the lifestyle that comes with it, which makes it such a great place for retirees!
If you’re interested in talking with me about this in more detail please reach out. I would love to answer your real estate questions.
