The State of the Market

By Sarah Ward REALTOR?

The last couple weekends I hosted several open houses for new listings and quite a few people came through each day so I had the chance to chat with neighbors and buyers. The top concern by far for the majority of people coming through was the state of the market. Both buyers and sellers are wondering if the market is going to fall. In some areas around the nation, the market has declined slightly, such as in Boise, Idaho. That market exploded over the last three years and prices have since declined slightly. Additionally when you read the internet media, click-bait headlines are popping up asking if the market is ready to plunge.

The truth is that currently, the San Diego market is fairly stable and steady. The College Area experienced a month over month, June to July, 11% increase in the median single-family home price. San Carlos had a month over month median sale price decrease of 7.5% and the Del Cerro/Allied Gardens median price was unchanged. Inventory across all three areas has remained very low over the entire summer.

There are some factors at play keeping the market lofty and in my opinion it appears unlikely we are going to have any type of significant drop in prices like we did in 2008 and 2009. During the early Obama presidency, many homeowners had little to no down payment loans and people were walking away from properties in droves and “turning in the keys” to the bank. Today, most homeowners are loaded up with equity and are not going to quickly walk away from a property. Also, the loan underwriting over the last ten years has been stringent. Loans were issued to mostly well-qualified buyers unlike in the years leading up to the 2008 crash, where loans were handed out like candy.

There are still a ton of buyers in the marketplace motivated to purchase a property as a hedge against ever rising rents. Since 2010, young people were less inclined to purchase a property and so there was a lag in homeownership in that demographic. But that trend has quickly reversed in the last few years as young people are suddenly desperate to purchase a property and many of these buyers are well qualified with good jobs from tech and science companies. In the last few weeks, all our listings have received multiple full-price offers and demand has been strong. A couple more factors keeping the market resilient include the lack of new development in San Diego County contributing to the very low supply of homes available to buy. Also, we are still receiving lots of offers from investors, who are frantically trying to find a decent priced property to park their cash as a hedge against the continuing inflation. The new $600 billion spending bill and 2022 trillion dollar budget deficit could add more inflation pressure to the economy. Also, prices in San Diego are still discounted compared to Orange and LA counties as well as the Bay Area, yet San Diego is (in my opinion) a superior location and city. Also, there are still quite a few out of state and out of country buyers coming into San Diego to buy property. Our population keeps increasing but very little new properties are being constructed, keeping prices pushing higher. Call me to discuss your local real estate plans are if you have any real estate related questions!

MARKET REPORT. 92115 College Area: Median home price up 11% from June to $950,000 and with only 23 properties sold. 92119 San Carlos: median home price down 7.5% from June to $1,017,500 and with only 16 properties sold. 92120 Allied Gardens/Del Cerro: median home price flat at $1,100,000 and with only 18 properties sold in the entire zip-code. Inventory is LOW!