San Diego September 2023 Market Update
Home prices in San Diego hit the highest levels they have ever hit, but there are some signs of them starting to slow down. So, in this video, we're going to cover exactly what that means for you if you're looking to buy or sell a home right now in San Diego. My name is Curtis Chism with the Chism team. If you're looking to buy or sell, all you've got to do is reach out to me via phone, text, or email. Let's chat about that.
Before we hit the numbers about where home prices are right now, let's hit the national news. What's happening and driving home prices here in San Diego? Obviously, mortgage rates are a key driver of housing prices. Inflation has been out of control but has been calming down, but recently has been ticking up.
We hit a low of inflation of three percent. Rose now to about 3.7 percent. That was kind of to be expected, but there certainly were some unexpected numbers thrown in there. Oil prices rising; looks like cars are going to start to rise again with the strikes going on. So, we'll see how that all plays out. But right now, mortgage rates are sitting right around 7.3 percent. They have been around the high sixes, low sevens for a while, rose unexpectedly quickly to 7.5, kind of freaked everyone out, didn't stop everything but certainly slowed things down, which I'll address.
Now they're sitting back around 7.3 percent and things seem to be settling out again. So, obviously, that's a key driver.
Median prices right now in San Diego again hit the highest level they've ever hit at 1 million and 25,000. That is a complete recovery from the market correction that we saw of about 15 percent where we were at a million dollars at a high about a year and a half ago in May and corrected 15 to 850,000, and that has completely recovered now at a million and twenty-five thousand dollars.
Now that's for single-family homes. For condos, the high is actually now at six hundred and seventy-seven thousand dollars, also a new high for condos, and that was up from six hundred and forty thousand dollars and that had also fallen off also around 15 percent, a complete and total recovery.
Now, there are some signs of things slowing down, but what I like to look at is the final sales to list price. So, what this number is showing us is what did that house originally list for, and then what did it ultimately sell for? It's the average of all the homes. It's been over a hundred percent. If you're over 98 in a market, that's actually considered a seller's market because not all homes sell for the list price.
Many often sometimes will sell under. So, overall, we've been over a hundred percent. In fact, we had 101 percent a couple of months ago. That is starting to tail off a little bit. We're seeing that both in single-family and in the condo numbers. And historically, what I've seen is that once that number starts to dip, then give it a couple of months, and home prices do start to come down just a little bit. So, we'll see where this number plays out. Along with that, we also have inventory levels starting to rise.
We're at about 4,000 homes total in the county of San Diego. That's still extremely low overall, only about 2.6 months of total inventory. I mean, if we stop putting homes on the market and sold through all our existing inventory of homes right now, it would take 2.6 months, basically two and a half months to sell through all that.
A balanced market is technically considered around six months. In today's kind of new economy, I would say a balanced market is really right where we're sitting right now, about two and a half to three months. Beyond that, I would say is more of a buyer's market.
So, what does all this mean if you're looking to buy or sell a home right now? Basically, what's happening is that we really are kind of in a balanced market. So, if you're trying to sell a home right now, you have to be extremely careful how you are pricing the home. If you overprice the home, which is very easy to do, the home likely will sit for a longer time on the market. Overall days on market right now is around 26 days on the market, so your home can certainly sit and then can experience price reductions in order to get the home to sell. So, the big takeaway here is to make sure that you're pricing aggressively so that you get a large pool of buyers looking at your home.
If you overprice your home by 10 percent, you reduce the pool of buyers down to only 30 percent of potential buyers. If you price it right, you're looking at about 60 percent of potential buyers, even underpriced a little bit as much as 10 percent, you can have 75 percent of your buyers looking at your home. That turns into more views online, more showings, and then ultimately more offers.
I typically see about one offer for every four showings. So, we want to drive those showings, drive those offers, bid the price back up, and get buyers to bid against each other and get that price right back up and get your home sold very, very quickly.
Now, even with all that said, you may still need to be prepared to provide some credits to the buyers to help them maybe with their closing costs or more specifically, that a lot of people are looking at our interest rate buy down. So, be prepared potentially for that as well, and we may have to negotiate on repairs with buyers as well.
If you are looking to buy a home, then we just need a really specific strategy for each home that we're looking at. Some homes are priced really well and are going to have a lot of bidders on it, and we have to be super, super aggressive about it.
Homes are still selling for well over the asking price, but depending on the type of home, it might be overpriced, it may not have a lot of bidders on it, other buyers, and we can be more aggressive about it. So, that's where when you work with me, we really sit down and figure that out, target the homes that we're going after, I contact the agents, figure out what's going on, and we get after actually getting you in a home. My average offer ratio is about one and a half, meaning that for every time that I'm working with a buyer, it takes one to two offers to get an offer accepted.
This is versus oftentimes people I've heard horror stories of 24 offers or more. So, when you work with me, we have a very specific strategy to get you into your home.
I hope you found this market update helpful. If you're looking to buy or sell a home, please reach out to me via phone, text, or email. Looking forward to talking soon.
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