Right now, there’s quite a buzz about what’s going on in our San Diego housing market and the market in general. Honestly, it’s pretty confusing. You might chat with friends and hear one perspective, catch a completely different angle on the news, and then stumble upon a social media post that throws a curveball into everything you thought you knew. If you’re considering making a move in this market, you’re bound to have a bunch of questions swirling in your head. This is exactly why connecting with a knowledgeable local real estate expert is so crucial.
So, let’s dive into the top 3 questions everyone’s asking about the current housing market and shed some light with solid data and insights.
1. What’s the Future of Mortgage Rates Looking Like in the San Diego Housing Market?
We’re seeing mortgage rates now that are notably higher than what we’ve been used to in recent years. If you’re in the market to buy a home, this definitely affects how much house you can afford, and understandably, you’re probably curious about what’s coming next for mortgage rates. To be honest, predicting these rates with absolute certainty is tricky, but we can make some educated guesses based on historical patterns.
Mortgage rates and inflation have this long-standing, kind of dance-like relationship. Typically, when inflation goes up, mortgage rates have a tendency to follow. Reflecting on the past year, with inflation on the rise, mortgage rates climbed too. But now, there’s a bit of a shift happening – inflation is starting to ease off. This is why the Federal Reserve put a pause on increasing the federal funds rate, leading many experts to think that mortgage rates might start to drop.
In recent weeks, we’ve even begun to catch glimpses of marginally lower mortgage rates. It’s been a bit of a rollercoaster, and it looks like this volatility might stick around as we head into next year. Some ups and downs are part of the journey, but looking towards 2024, there’s a growing expectation of a downward trend in rates. As Aziz Sunderji, a savvy Strategist at Home Economics, puts it:
“The bottom line is that interest rates are likely to be lower-perhaps even lower than many optimists think – in the weeks and months to come.”
2. What’s the Future of Home Prices in San Diego?
You might be wondering about the direction of home prices this year. Despite concerns of a dramatic downturn, the reality has been quite different. Instead of dropping, we’re seeing an upward trend in home prices in San Diego and across most of the country. What’s more, experts anticipate this rise to continue, albeit at a steadier, more sustainable pace. This shift towards normalcy in the housing market is a positive sign.
To underscore this confidence in the market’s ongoing appreciation, let’s look at the Home Price Expectation Survey conducted by Pulsenomics. This survey gathers insights from over 100 economists, real estate specialists, and market strategists. As depicted in the graph below, there’s a strong consensus that prices will maintain their upward trajectory in the coming year and beyond.
3. Are We Heading Toward a Recession?
The topic of a potential recession has been a buzzword lately. However, there’s encouraging news in this regard.
The Wall Street Journal frequently conducts surveys with experts on this subject. Last year, many of these experts were bracing for a recession by now. But, reassessing the current leading indicators, they’ve started to revise their views, suggesting that a recession is becoming increasingly unlikely. Recent survey results reveal a growing number of experts who believe a recession is not on the horizon (refer to the chart below for details).
This is significant for the housing market. While the current expert opinion is almost evenly split, it’s crucial to note that the majority now believe we’ve already sidestepped a recession. This shift in perspective is vital for understanding the housing market’s trajectory and how it impacts your real estate decisions in San Diego.
Final Thoughts on the San Diego Housing Market
What’s the essential message here? Well, after delving into the latest data, it’s clear that there’s no need to worry. In fact, there are plenty of reasons to be optimistic. As we approach the new year, it’s the perfect time to have a chat about any questions you might have about the housing market. Why not reach out to us at the McT Real Estate Group? Let’s connect and explore what the future holds for you with regard to real estate in San Diego. Together, we can make sense of the trends and set you up for success, whether you’re buying or selling.