Will San Diego Home Prices Finally Drop?
Call George Lorimer and Start Packing at 619-846-1244
- PRICES ARE UP 20% from last year and 20% from the year before
- Mortgage rates are up from 3.25% (Jan 2022) to over 5.5% (Jun 2022)
- Buyer demand has dried up (down 30%)
- Because homes are less affordable (prices have increased and mortgages up), the demand has dropped.
- Supply is increasing – More homes are on the market, and market time is increasing (was 17 days, now 34 days).
Sellers – Over the last two years, prices have been up 40%, and affordability is causing a flattening market. Experts predict that 2022-2023 prices will go up 5-8%. If you have thought of selling, sell now. It will be more competitive to secure a buyer, and you have to be priced competitively with other homes. We have not seen home prices dropping. Overpriced homes are not selling like they have the last few years. Last week 22% of listed homes reduced their price.
Buyers – With the price appreciation and mortgage rates increasing, it has become less affordable. We are also seeing rents increase similarly because the cost of money and inflation are increasing, thus affecting rents. The supply of homes is below the pre-pandemic supply.
Click here for a free download of this report
If you are waiting for a significant market adjustment (prices to drop substantially), we don’t see the supply of homes and distressed sellers creating a drop in prices. However, if you have been thinking about buying, more homes are available to look at, fewer overbids, and multiple offers.
If you were planning to live in San Diego for over three years, you should be considering buying now. Hopefully, there will be 5/1 – 7/1 – 10/1 loans you can get that will be in the 3%-4% range and refinance once rates drop. Unfortunately, fortunately, most predict mortgage rates to go up before they go down.
Distressed – there are nine foreclosures and one short sale available today. Last year there were 20 all year. There are usually 35,000 to 40,000 homes sold every year in San Diego County.