San Diego Housing Market Crash Over in May 2023

The housing market here in San Diego continues to rebound as we head full steam into the spring and summer selling season, but you're probably still hearing Doom and Gloom in the headline news, so let's get after what's really happening with home prices here in San Diego and what this means for you if you're getting ready to buy or sell a home.

Hearing in the news that house prices continue to fall here in San Diego, now there is truth to that when looking year over year numbers. However, home prices actually bottomed out in January and have risen for three months straight. 

So if you're thinking the housing market is overpriced and waiting for home prices to fall, that already has happened. So housing prices are going up, so congratulations, you hit buy while prices were going on their way down, but they have hit the trough and now you can buy and start building wealth through the equity gain in your home just through the appreciation that's already happening as home prices continue to go back up.

Home prices fell by 15 percent from May 2022 to January 2023 and have already gone up 12 % from the bottom. If you're a seller that didn't want to chase housing prices down and waiting for prices to stabilize, well, we're seeing multiple bids on homes and our homes are selling for over list price again.

We're going to cover exactly what you need to know if you're looking to buy or sell a home in this video. Now of course, this is completely different from what you're going to be hearing from the mainstream media, but that's why you're watching these videos for me because I really dig into what's really going on to help you make great decisions in real estate.

Now the mainstream news is still reporting on data that is several months old and telling you that home prices are going down and mortgage rates are going up, but the complete opposite is true, home prices have bottomed out and are going up, and mortgage rates have actually stabilized for several months now right around six and a half percent.

So, stay tuned for why I think we're on the verge of home prices maybe really going back up real quick.

My name is Curtis Chism with the Chism team, brokered by Exp Realty, and if you or someone you know is looking to make a move, just give me a call, text, or email and let's chat. Now, if you've been following me, you'll know that mortgage rates are really tied to inflation, not the FED raising or lowering the overnight lending rates to Banks. 

 The reason for this is that banks have to lend money at or above inflation rates. You'll also know that I've been predicting that inflation rates will continue to fall and mortgage rates with them, and sure enough, inflation has fallen again to 4.9 percent down from five percent last month and 6 percent the month before. Now I'm anticipating inflation to really start dropping off this summer as several things that make up core inflation continue to drop, which include shelter costs, oil, and used cars, both of which spiked in April, and mortgage rates continue to hang out around six and a half percent and have pretty much stayed there for the past few months with some minor fluctuations. If inflation rates continue to fall, then mortgage rates should fall accordingly, and we could see a big uptick in demand this summer.

In fact, for every one percent drop in interest rates, 5 million new buyers become eligible to purchase homes. So, we're seeing sales activity here in San Diego and around the US really pick up as we head into the spring and summer months. And we're seeing all that pent-up demand that I've been talking about, especially from Millennial buyers, really start to get unleashed. And many more are returning. Home prices are going back up. Couple that with potentially tons of new buyers entering the market because of potentially lower interest rates in the next few months, and prices really can start to surge. So, let's dive into what is actually happening here in the San Diego housing market.

Well, housing prices rose this past month by $12,000, and the median sales price for single-family homes last month was $952,600. That's up from a low of $849,000 back in January. So, just in three months, home prices have risen over $100,000. Condos also rose again this past month, and the median price right now is $640,000. That's up from a low in December of $585,000. The inventory of homes remains very low at just 2,500 homes on the market. Now, this is the same as what we had last year and is still about half of what a normal market should be for this time of year. Homes are selling faster and faster, with the average days on the market falling to 29 days for single-family homes. This is down from 43 days on the market, and they're selling about two weeks faster than they were two months ago. So, it's another indicator that the market has picked up again as we work our way through spring.

We're seeing bidding wars on homes priced and marketed well. The home is overpriced and is still taking a long time to sell. And the other big data point that I like to look at is the final sales to the list price percentage. This tells us how much above or below the list price that homes on average sold for. If, on average, the final sales price is 98% of the original list price, that's considered a balanced market. Anything over that indicates the seller's market and below that indicates the buyer's market. Here in San Diego, we're now at 99.7% final sales price and 100.3% for condos. So, we've solidly swung back into a seller's market.

So, what does that mean if you're looking to buy a home? If you're thinking about buying and you've been trying to hit the market right at the bottom, then I'm here to tell you that we have bottomed out back in January, and we're on our way back up. I've had people tell me they're waiting for prices to fall, but frankly, prices already did fall. In fact, they fell 15% and have rebounded 12% from the low already. If prices were to fall another 15% or 25% from where they are back now, you're really just wishing for something that has never happened. And so, that would be a crazy cycle.

So, I would not count on that happening at all. I would count on prices being stable and going up for the time being. If you're ready to stop renting and looking to buy your first home or make that move up or downsize home purchase now really is the time to jump back in.

I've been saying that the window of opportunity for buyers to purchase a home, negotiate a price reduction, lots of repairs, and credits were going to close around April or May, and that's what we're seeing to be true on some homes.

You still will have negotiation power, and it really comes down to each home that you're looking at, depending on how a home is positioned, meaning how well it's priced, what kind of home improvements have been done, and how well it's been marketed. Well, depending on how much buyer interest there is in the home, so if there is a lot of interest, then you're just not going to have much negotiation power to extract those credits and price reductions. If a home is overpriced, then there'll be less interest and you'll have more power.

This is why you need to contact me to help you buy a home so we can analyze each home that you're interested in and find out what offer a strategy to use on that home. Every home is different and requires a different strategy, so just be prepared that our options are going to be much more limited now than just a few months ago, and you're going to want to get ahead of that large pool of buyers that will be unleashed.

Now, if you are planning to sell a home, this is everything you need to know to be successful in selling your home in today's market. So even though buyer demand is getting stronger and prices are starting to stabilize and go back up, we are not fully back into a true seller's market. We're essentially in a balanced plus market.

That means that it's more important than ever that you call me so we can put together a customized plan to sell your home on the best terms that you're looking for. We'll make sure that we don't overprice that home, causing it to sit for months. Instead, we'll price it with my proven strategy to generate tons of traffic online, which will turn into showings, offers, and bidding wars that will give you the leverage that you need to get the price and the terms that you want. Also, please just be aware that even with multiple offers, you still may have to give some closing costs to help offset loan interest rate buydowns for buyers so they can afford to purchase that home.

So, if you are wanting to get an idea of what your home may sell for and what it should be priced at, just contact me. I'll run a no-obligation home value for you. And that's a complete overview of the housing market here in San Diego.

Just leave me a comment or shoot me an email back and let me know what you think, and I'll see you on the next video.