Will housing prices go down in San Diego in 2022?

Will housing prices go down in San Diego in 2022?

If you’re concerned about the housing prices going down in San Diego in 2022, here is what is actually happening. Home prices shot up here in San Diego in January from $850,000 to $885,000. That is a gain of 4% in just one month. If you annualize that over the year. it would be 48%. I don’t anticipate home prices going up by that much this year and let’s hope not for affordability reasons. 

However,  in just one month, homeowners gained 4% on their homes. I’s absolutely incredible! Townhomes and condos were a little bit more modest they gained just $10,000 this month and went up about 1.7%. Traditionally, January is one of the coolest months for the housing market. House prices typically dip in January in San Diego. With the exception of 2020, pretty much every year before that, it dips in January.

This year it’s going up, so what is that spell for this year? I think we’re in for another wild ride and very strong gains in appreciation on homes. So if you’re a home seller looking to sell, you’re in the driver’s seat still. If you’re looking to buy it’s getting harder the longer you wait to buy a home, the less house you’re going to be able to buy for your money.

Here’s what we’re seeing is that interest rates are starting to rise you’re basically looking right now around 3.85% percent trending towards 4%. So you’re going to get less home for your money. The longer you wait, the house you’re going to buy in six months is not going to be the house you were looking to buy right now. 

We’re seeing a couple of really interesting things in the data with sales right now, and that is that the final sell price to original list price is trending up to 103% of sales to list price. So people are paying more for the home. We’re also seeing days on market go up, which normally indicates a cooler market, but here’s what’s happening is that a lot of people are looking to sell their homes right now. 

So maybe they got a home that isn’t so great and so they’re putting on the market trying to get top dollar for their home and those are the homes that sit a little bit longer. The hot homes, the ones that are prepared correctly, staged, and look great, are selling super fast. They’re selling over a weekend with multiple offers, tons of showings, and strong terms for the seller. 

Inventory continues to fall as well the available number of homes. We’re sitting right around 1,700 homes at the moment. We had fallen to about 1,600 homes. What’s happening is a lot of sellers are thinking “Hey, I’ve got to move somewhere” and there’s nothing available. So they don’t want to sell their home and sitting on their house rather than selling. This creates this vicious cycle of lower inventory,

Now there are some ways around that. For instance, I have a fantastic program called a Home Trade-In Program. It allows you to shop for a home first, unlocking the equity from your house, and then you can buy your home. Then, turn around and sell your existing home after making your purchase. So it gives you the option to go ahead and take your time, find that perfect house you’re looking for, and then go ahead and sell it.

The biggest potential weight on the housing market here in San Diego is mortgage rates rising and the War in Ukraine. We’ll see where mortgage rates go. If they stay where they’re at right now, it’s probably not going to have a massive impact, I just had a listing go live with  92 showings and we sold at $175,000 over list price.

The housing market is still strong despite the rising interest rates but if they click higher over 4%, trending towards five which seems unlikely. That would weigh down on the housing market as well.  And of course, the War in Ukraine may have an impact if this drags out and Russia gets backed into a corner. It’s far too early to know what’s going to happen with real estate and the war in Ukraine.

Curtis Chism, Realtor
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