Whispers of a coming economic downturn have put some San Diegans on edge. After nearly two years of rapid price appreciation, heightened buyer demand, multiple offers, and quick sales, the outlook for the market in Fall 2022 and beyond is quite different from what many sellers and buyers may have assumed to be the “new normal.”
Markets ebb and flow, a normal and healthy part of any economy. While a shift may be looming on the horizon, it’s important to know the facts about how past economic downturns have truly impacted the US housing market on both a national and local scale.
Did you know that home prices have appreciated during four of the last six recessions? According to a recent report from WFG Title, home prices rose during the softening markets of 1980, 1981, 2001, and 2020. Even in 1991, home prices nationwide only decreased by about 2%!
What can we expect for the San Diego housing market in the next six to twelve months? Many experts believe we’ll continue to see prices appreciating, just not at the extreme rate of growth we saw during the height of the pandemic. Although mortgage interest rates have increased (the average rate for a 30-year fixed rate loan recently crossed 6%), interest rates are still historically low. Many buyers who were squeezed out by too much competition and a lack of inventory are looking at properties and making offers on homes now. Currently, home prices for all properties in San Diego are up 7.4% from last year at this time. Curious what the market looks like in your neighborhood? Reach out to me to receive a tailored market report and estimate of your home’s current value.
Home prices may be growing across San Diego County, but so is the average market time. In a report released last month from the San Diego Association of Realtors (SDAR), the average single family home spends 28 days on the market. The average condo in San Diego spends 24 days on the market. Since last summer, we have seen a large increase in the average market time – about 35%!
However, it’s important to remember that last year at this time, homes were selling in a matter of days or even hours. In a normal, balanced market, homes typically take thirty to ninety days to sell. What we’re seeing now in the San Diego market, is not a sign of an impending housing crash, but a shift back toward normal.
Inventory of Available Homes
Increased market time is typically a sign that the inventory of available homes is growing. When buyers have more options, multiple offers decrease, and homes spend more time on the market before going under contract. Currently, the supply of available single family homes is up 20.1% from last August. The supply of available condos is up 22.3%.
If you’re thinking of selling during the next three to eighteen months, who you work with will be critically important. Partner with an agent who not only has the market insight and experience to price a home correctly, but to market it effectively. Even with the recent changes in the San Diego market, I’ve successfully sold three luxury properties this past month in a matter of hours while setting sales records in those communities. If you’re thinking of selling, I would love to show you how my proven marketing strategies will work for you!
Don’t let the headlines sway you from the truth. Every market brings opportunities and with millions of people moving to San Diego each year for new horizons and new career opportunities, our local market will likely absorb any economic downturn with minimal disruption.