Written by Courtland Young REALTOR® SRES® / Loan Officer CAL. BRE# 01468400 NMLS# 1692428
June 10, 2020
San Diego Home Prices Surge
San Diego Home Prices are going up and the Real Estate market is HOT! But, is it? Yes, There is a ton of action in the market place and competition for these San Diego homes is fierce with many properties seeing multiple offers causing San Diego home prices to go up. But, what they aren’t telling you is that this is anything but a normal market right now here in San Diego, let alone the rest of the country.
Yes, summer is heating up and the San Diego home buying season has started. Covid-19 sure did a good job slowing the sales of San Diego homes and keeping San Diego home prices steady over the last few months with closed sales down almost 45 percent from May 2019 to May 2020. We can contribute this downturn to many sellers holding off putting there San Diego homes on the market due to the Covid-19 pandemic and many buyers holding off as well.
Now that things are opening up San Diego home prices seem to be moving upward. Many buyers are ready to take advantage of these historically low interest rates by purchasing a home in San Diego, but the numbers are showing San Diego home sellers are still skeptical despite it being a sellers market. So what is happening to San Diego home prices is simple supply and demand.
Above is a chart of the amount of months of inventory for the San Diego home market for 2019 and 2020. Anything over 4 months of inventory you start getting into a buyers market with houses sitting longer on the market and San Diego Home prices starting to go down. Right now San Diego home prices are moving up and houses are not sitting on the market that long at all. Actually, we are saw a 17.2% improvement over last year or better put, we are seeing homes sell 17.2% faster then this time last year.
With interest rates at historical lows many first time San Diego home buyers are looking to take advantage of the low mortgage rates and are flocking to the market. On the Mortgage side of the business we have seen over a 9% increase nationwide in home buyers according to the Mortgage Bankers Association. On the seller side we continue to see hesitation and many sellers just are not putting their house up for sale even with the historically high San Diego home prices. With low interest rates, pent-up-demand, and low inventory San Diego home prices are going up because of multiple offers due to lack of inventory.
Only time will tell if San Diego home prices stay hot or if San Diego home Prices fall flat. I personally think it all depends on a 2nd wave of Covid-19 whether San Diego home prices go up or if San Diego home prices go down. If we can keep business open and we have a quick recovery I believe san diego home prices will keep going up in 2020. If we have a second wave, then I think we will stall and maybe even worse hit a massive recession. You can also read a few San Diego Real Estate analysts opinion in thisSan Diego Union Tribune article “Will San Diego home prices be higher or lower at the end of 2020?
One thing is for sure at the present time, if you are looking to sell your home, now is the time to do it!
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