Shocking News San Diego Home Prices | San Diego Housing Forecast
Home Prices
The new median price just came out for San Diego County and we just hit $1 million as the median price in San Diego. It’s up $150,000 just since December and that is up 17.6% in just 4 months. Overall, year over year, we’re up just over 19% so we saw most of those gains occur just in the past 4 months. As hot as the real estate market was in 2021, the median price actually was relatively stable throughout 2021. And it’s accelerating as we’re in 2022 heading into the second part of Q2 here in 2022. That’s the median price for single family homes.
Condos are now at $660,000 and that is up $75,000 since December or just over 12%. Now, year over year for condos, we’re up about 24% since last April. We’re seeing a little bit more of a slowdown in the condos happening first, as far as the overall price. I think some reasons for this is because people are basically getting priced out of the market. And normally what we’ve been seeing in the past fewmonths is more of a flight in the condos because that’s a little bit more affordable for people that can’t afford the single family homes.
I think what we’re starting to see though now is that people are deciding they don’t want to buy a condo if they can’t buy a single family home. And they’re choosing to continue to rent instead.
So I think that’s why we’re seeing a little bit of a slowdown first in the condo space. And that’s what’s going to happen is people are starting to drop out of the market because of interest rates rising and the house prices going up. Some people just cannot afford it anymore. Although Rents are rising, they’re not rising as fast as home prices and it’s becoming cheaper again to rent than to buy. Now over the long term, we all know it’s more expensive to rent than to own, since you never build equity in a home by renting.
Mortgage Prices
Now, we need to touch on mortgage prices, and it’s all over the news. The Fed just raised their target benchmark rate up one half percent and interest rates are up over 2% since the start of the year.What you could have bought for 3% interest back in January, you’re now going to be paying more like 5.5% here in May for that same house. If you were trying to buy a home that was $750,000, 4 months ago, that same home is closer to $900,000 with higher interest rates. Your mortgage payment just went up about $2,000 a month. That’s what’s dropping a lot of people out of the market right now. And again, people are choosing to rent instead of buy, instead of going into a condo space, cause they really don’t want a condo. If they’ve got a family, maybe a condo is not such a great solution for them.
Bidding Wars on Homes Intensifying
Another super interesting data point that I look at is the final Sales Price to the Original List Price of the home. If the home is listed for $900,000, what did it sell for? Did it sell for $900,000 or did it sell for less or or for more. The average final Sales toList Price is 107%. Again, we’re seeing this number accelerate. We were sitting around 102%-103% at the start of the year and starting February, it went to about 104% and thenin March it went to to 106.9%. And then now we’re at 107%. Bids are getting more and more aggressive, most likely people trying to get into a home before interest rates rise even more.
We’ll see what happens as we head into May and June. The summer months, traditionally are very strong selling seasons. I think we’re still going to see very strong prices, but I think you’re going to start seeing homes go for potentially not quite as far overbid price heading into the back end of summer, especially. The summer months here coming up are still going to be very aggressive.
I’ve been involved in some bids where they went $300,000 over on the list price. Again, very aggressive and that data is not going to show up until May.
Inventory of Homes is Rising
And finally, we look at inventory. We’re at 2,520 Homes for Sale right now in the County of San Diego. That’s actually up significantly the first 3 months of 2022, we were sitting around an average of 1,700 homes. We haven’t seen 2,500 homes for sale in San Diego since October of 2021. Now that being said, we’re still down overall inventory from last April of over 20% and the closed sales as also down 20% from last year. Overall, there’s less activity in the market, but the homes that are selling are selling fast just 19 days on market, which has been holding pretty steady for the last few months. So selling very, very rapidly, any hot home is selling in the first weekend.
Cash Offers are Ramping Up
I was actually just involved in setting up a showing for a buyer and we were going to look at the house and it was on the market for less than 2 days and they got an offer. They could not refuse and took it. We couldn’t do the showing. People are getting aggressive and they’re still buying as rapidly as possible. I’m seeing a lot more cash hitting the market. A lot more cash offers are coming in on listings, especially the listings that I’ve had recently. Usually, I would have one cash offer. Now I’m getting 3 or 4 cash offers. Sometimes from investors, but oftentimes from individuals that are looking to buy for their family,
Multi-generational Buying
I’ve seen a couple of situations where it’s been this multi-generational buying, where a grandmother is buying for a son or grandson. Overall in the market, we are seeing institutional buying take place as well, where large institutions are coming in and buying in the market as well. I personally have not seen that too much on any of my listings or the transactions that I’ve been involved with. But overall that’s still occurring and that’s going to keep the market up as well as large institutions are pouring their money in looking for those high rents, very stable returns that they’re not getting to the stock because as you know, stock market keeps getting hammered.
Overall it’s super interesting news with the medium price, hitting a $1Million and how’s it still selling for well over list price. Again, I think we’re going to see this maintain through the summer, the median price, continuing to go up and over bids occurring on these properties.
Curtis Chism, Realtor
858-281-2568 | Mobile
mailto:info@sandiegohomes.io
Chism Team | DRE #02105113
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