Lowest Housing Inventory Ever in San Diego

We're facing record low housing inventory in San Diego, and many other areas across the country.?How low...can these housing inventory levels go?

Welcome back!?I’m Erik Braceland with Braceland Homes here in sunny San Diego, California, where we guarantee the sale and/or purchase of your home.?Here on the Braceland Homes channel we cover topics related to buying and selling residential real estate, and trends happening across the housing market.

I want to show you what's going on with housing inventory in our San Diego real estate market, and other markets here in the US. So, don't jump ship just because you're not here soaking up the sunshine here with us in San Diego.?There's something here for all of you...and maybe I'll even convince you to move here at some point.?As an added bonus, I've decided to include recent footage we've taken of local neighborhoods and hotspots, as well as some hidden gems here in San Diego County throughout these videos.?That's what's going on behind me right now.?I'll leave some info about this location in the description, so check that out, and leave a comment to let me know if you like this.?We'll take a look at why housing inventory is so low, and how that will impact you as a home buyer, and/or a home seller. ?So that’s my goal over the next roughly 10 minutes. Quick disclaimer, since my last video, I did get invisaliners installed in my mouth, so I'm gonna do my best to speak without a lisp.?If you don't already know, invisaliners are just those invisible braces that folks get now.?Much more comfortable than the old metal-mouth braces I originally had as a kid, but still an adjustment to the old routine. Alright, you Ready??Let's do it!

First a quote from or friends at Calculated Risk. “It is possible that rising mortgage rates will slow the housing market. Or the fed might raise rates sooner than expected due to the recent pickup in inflation. But I believe one thing is certain: housing inventory will tell the tale.” And you know, I believe that’s the truth. ?Housing Inventory will tell the tale. Listen, there’s so much speculation in the housing market right now. What’s going to happen with mortgage rates? What’s going to happen with the Fed? What’s inflation doing? Let’s add coronavirus to that, and all the different variants. So much out there, people speculating on, and its impacting real estate, just as it is everything else. But I can guarantee that inventory will be the market indicator this year.

The bad news is: home listings are at record lows. Over the last couple of years, if one thing has been true...it is that low mortgage rates, people’s definition of home, and people’s desire to own a home, have depleted housing supply all across the country. Number of different reasons for that.?We’ve covered those extensively in past videos. Probably the biggest contributing factor right now, is home sellers delaying the sale of their home because they don't want to face the same trials and tribulations that all you home buyers and real estate investors are up against right now. And we'll take a deeper look at that shortly, but most home sellers need to purchase a replacement home, whether they are moving up or down-sizing.?The bottom line is, home listing activity is at record lows.

Let's look at a graphic representation of this. This is a look at housing inventory year over year. ?Realtor.com looked at where we were in December 2020. And where we are now in December 2022. ?So just a month ago. ?The most recent data. The national average you see kind of at the middle of the bottom of this slide, almost 27% down year over year. So only a year ago, when housing inventory was at already at record lows, we had 27% MORE homes available for purchase!?Unbelievable!?And now you can look across the country. Idaho kind of leading the way with an extreme dip of 55% down there. But most of the country in this lighter brown color somewhere between 15 and 30% down. Here in California, we're just above average at almost 28%, meaning we have slightly LESS homes available than the national average, but no doubt a significant lack of inventory across the country.

Now, the truth is, right now in real estate, we will not be able to reach market potential, because you can't buy and sell what isn't available.?We're stuck in a negative inventory cycle caused by multiple factors including all those sellers delaying the marketing of their homes.?So amazing opportunity continuing for those of you home sellers out there willing to list. ?Maybe.?If there was more housing inventory, you’d probably see more homes sold in this country than ever before...by a lot. But the homes just aren't there right now. ?I’m not saying it’s impossible to buy a home right now, but I do understand the frustration for those of you looking to buy a home. ?Conversely this also effects most home sellers because most of you need a replacement home.?Not too many home sellers fortunate enough to be liquidating second and third homes simply to take advantage of the generous sale prices.

If we look at this overview going all the way back to 2019, we can see months of inventory in residential real estate, all the way back to January of 2019. ?So, starting here in January of 2019, we have four months, on average, let’s call it, in supply. We dip down in 2020, and spike back up during the lockdown in April and May of 2020. And then sort of depleting our housing inventory since then. We had the record low housing inventory in December and January last year of under two months’ supply. And now we’re right near that as well. So, inventory is sort of edging lower each year as we move on. ?That’s the bottom line with housing inventory right now. We just don’t have what we need for a healthy housing market.

I do want to give you a quick look at our San Diego housing shortage, so you can observe the extremes of some of these inventory levels.?Earlier we talked about how the California housing inventory was down by almost 28 percent year over year, but if you look here you can see our San Diego housing inventory is down over 50% with just three thousand two hundred and twenty-eight homes for sale in December 2020, and recently only sixteen hundred homes for sale in December 2021.?I said it before and I'll say it again...Unbelievable!?I also wanted to show that, even with our traditionally low inventory, compared to the national average, our housing inventory in San Diego hasn't even come close to this extreme low level in over a decade.

With that image in mind, You home buyers and real estate investors will need to really stay focused on your end game.?Understand that you'll surely face competition for the home you want, and will certainly pay more than you'd like to for that home.?Just remember to align yourself with a great real estate agent to navigate the bumps in the road, contract headaches and negotiation stressors.?The right real estate professional is really crucial to your success in a market like this.?And stay focused on all the positives that acquiring that new home will bring.

What about you home sellers??You in for a treat on the sell side.?Relatively quick, easy sales with little or no concessions, and great profit...if your home is marketed properly by a skilled agent, and, it is what buyers are looking for.?Caution; Do not get greedy and overprice your home!?I see this constantly right now.?Home owners see what has been happening, and want to get one point five million dollars for their one million-dollar home.?Don't be that person...unless you want to alienate seventy-five percent of your potential buyer prospects, reduce your price multiple times, and double or triple your market time.?Pricing is super important!?Price your home right, and let the market determine the actual price limit.?Yes, everything is basically selling right now, but you can still endure a greatly protracted, stressful, and miserable home selling experience if you aren’t careful with your sale.

That’s the bottom line with inventory right now. We just don’t have what we need for a healthy housing market.?How low can it go??We'll see.?It's not going to get better overnight, but I do believe more inventory is coming, and when it does we'll start to see some relief with home prices.?Whether you need to make a move right now, or you are in the early discovery stages, it's always helpful to align yourself with a great Realtor that can guide you through the process, explain different scenarios, strategies and tactics to you, and answer questions as they come up.?So, don't hesitate to call me at 619-947-3560 if you are planning to make a move.