San Diego’s Real Estate Market – August 2024

Let’s talk about San Diego’s Real Estate Market in August of 2024

When someone decides to bake, and they have kids helping out, there’s usually a lot of excitement and high hopes of pulling out a flawless cake from the oven. Mixing the ingredients, pouring the batter, and closing the oven door all happen with anticipation. The sweet aroma fills the kitchen as the timer counts down. However, upon opening the oven, disappointment sets in as the cake fails to rise as expected. Time seems to drag on as everyone’s excitement fades away while waiting for that cake that turns out not so perfect.

Sometimes, the baking process goes perfectly, and other days, after hours of effort, only one comes out looking right. And then there are days when nothing turns out as planned—despite trying different recipes and adjusting every ingredient, the result is disappointing, to say the least. A big part of baking is perfect measurements, observing what others do successfully, and coming prepared with an extra dose of patience.

What Does the  San Diego’s Real Estate Market Have To Do With Baking? 

Many of today’s home sellers resemble first-time bakers. They enter the market excitedly, expecting multiple offers to roll in within days. They’ve heard stories about the market being on fire earlier this year. Back in March, homes sold at or above their list prices, and the demand seemed insatiable. However, after placing the FOR-SALE sign in the yard and opening their homes to buyers, the days stretch into weeks, and sometimes those weeks turn into months. The housing market has shifted. What was once a hot Seller’s Market has now become more balanced, where pricing your home correctly is the key to success.

52% of all homes available for sale have been listed for a minimum of 30 days. What’s more notable is that 28% of these homes have been waiting for over two months without receiving an acceptable offer. It can be quite challenging to maintain a home that is showing condition for such a period, especially if there are kids or pets in the household. While it’s common for luxury properties to remain on the market for longer, many homes in the affordable price range are also facing delays. For instance, nearly half of the homes priced under $750,000 have been listed for over 30 days, with around 28% waiting for two months.

San Diego County Expected Market Time Graph by Reports on Housing
San Diego County Expected Market Time Graph by Reports on Housing

Market Time for Homes $750,000- $2,000,000

For homes priced from $750,000 to $1 million, 20% have been listed for sale for 60 days or longer. As the price range goes up to between $1 million and $2 million, this percentage rises to between 21% and 27%. For homes priced over $2 million, the wait time gets even lengthier, with a range of 35% to 57% of sellers waiting two months to secure a buyer.

Homes in San Diego County are currently taking longer to sell compared to this year and last year. The Expected Market Time, which indicates the duration needed to sell all listings at the buying rate, now stands at 73 days. In February, this figure was 43 days, marking the pace in 2024. This shift reflects a change in the market dynamics. Around this time last year, homes were sold within 45 days, showing a faster selling process than what we are observing today.

The housing market in San Diego County has experienced a slowdown since the beginning of spring. Even though there is an 8% increase in demand compared to the year, more homes are being put up for sale. Despite listings than before the pandemic, this year has seen a 22% rise in listings compared to 2023—resulting in an inventory growth from 2,569 homes in February to 4,570, marking a significant 78% surge. At this time of year, 43% of homes were available for sale on the market.

Pricing Your Home Right: The Key to Success in San Diego’s Real Estate Market

Our housing market has changed significantly compared to earlier this year and last year. If you are a Seller, be patient and set your asking price carefully. You have to factor in the home’s condition, location, upgrades, and amenities. And then there may be times that you and your Realtor thought the price you were going to go on the market with was the correct price, but for whatever reason, the market says differently. Make sure to make the adjustment quickly and jump in front of the market.  Unfortunately, some sellers resist expert advice and refuse to price their homes at Fair Market Value. As a result, they’re still waiting without any offers.

San Diego's Active Listing Inventory Graph by Reports on Housing
San Diego’s Active Listing Inventory Graph by Reports on Housing

San Diego’s Active Inventory

The active listing inventory in San Diego County increased by 111 homes over the past two weeks, reaching 4,570—the highest since August 2022. Inventory growth is slowing, with a peak expected soon, followed by a decline in the fall and a sharp drop during the holidays. Last year, the inventory was 43% lower, and pre-pandemic levels had 57% more homes.

Many homeowners are choosing to remain in their homes because of the low mortgage rates, resulting in a decrease in new property listings. In the month of July, a total of 3,287 sellers decided to put their homes on the market. This number reflects a 33% drop compared to COVID levels but represents a 21% increase from the same period last year.

San Diego County Active Listing Inventory vs Demand Graph by Reports on Housing

Increase Demand From Home Buyers

Demand increased by 70 pending sales, up 4%, driven by lower mortgage rates. At 6.5%, rates are a full percent lower than in April, making homes more affordable and boosting buyer interest. We expect demand to strengthen as rates drop further. 

The Federal Reserve is monitoring indicators such as the PMI and jobless claims, which have the potential to influence mortgage rates. Depending on the results of this week’s reports, rates may increase or decrease. Most people are eagerly waiting for this.

Demand was 8% lower last year, while pre-COVID averages were 70% higher. As demand rose, the Expected Market Time dropped slightly to 73 days, compared to 45 days last year and 68 days.

Conclusion: Adapting to the New Market

As we approach the half of the year, it’s evident that there have been changes in the San Diego real estate market. Sellers should maintain patience. Set prices thoughtfully to achieve outcomes. Given the evolving demand and varying mortgage rates, being well-informed and flexible is crucial. Whether you’re in the process of buying or selling, being aware of these developments will empower you to navigate the market.

More Homes for Sale in San Diego: What to Expect in Your Area

More Homes for Sale in San Diego and What to Expect

One of the most encouraging developments in today’s housing market is the steady increase in the number of homes available for sale, especially compared to the start of this year.

According to recent data from Realtor.com, the national housing inventory has grown by 36.6% compared to this time last year. This expansion offers potential buyers significantly more choices than they had just a year ago. With more homes on the market, buyers are also gaining back some negotiation power, which is great news for those who may have felt discouraged by the tight inventory in recent years.

San Diego, like many areas, is experiencing this shift in the market. Although the housing inventory has improved, it’s important to understand that we’re not facing an oversupply of homes. The increase in available properties provides more opportunities for buyers, but it’s still far from pre-pandemic levels. In fact, current inventory is about 29% lower than it was during the more typical years of 2017-2019.

The Supply of Homes for Sale Is Improving Graph by Realtor.com

As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), aptly points out:

 “Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions.”

So, if you’ve been considering buying a home in San Diego but were discouraged by the limited options in the past, this market shift is a positive sign. However, keep in mind that while supply is improving, the market remains competitive, and home prices are not expected to plummet.

How Inventory Growth Impacts Your Neighborhood

Even though housing inventory has risen nearly 37% compared to last year, we’re still not at the levels seen in a balanced market. According to Bill McBride, a housing analyst for Calculated Risk:

 “ . . . currently inventory is increasing year-over-year but is still well below pre-pandemic levels.”

Inventory is Up the Most in the South and West Graph by Realtor.com
Inventory is Up the Most in the South and West Graph by Realtor.com

Nationwide, it will take time to return to the typical number of homes for sale available. However, there is encouraging news for buyers—some regions are seeing inventory levels approach pre-pandemic norms.

In San Diego, for example, the housing market remains competitive, but certain neighborhoods are beginning to see more listings pop up. This shift can offer more opportunities for buyers to find their ideal home, especially in metro areas like North Park and South Park.

Since real estate conditions vary greatly by location, it’s essential to stay informed about your specific area. If you’re curious about the current inventory in your neighborhood, connect with a local agent. They can provide insights on how your market compares to the national trends and help you spot potential opportunities to buy or sell in San Diego.

 

Bottom Line on More Homes for Sale in San Diego

The housing market is seeing a noticeable increase in available homes nationwide. For buyers, this means more choices and a greater opportunity to find a home that fits your needs.

In San Diego, where the market can be competitive, this uptick in supply could be just the break you’ve been waiting for. More homes on the market mean a better chance of discovering the perfect fit for your lifestyle and budget.

So, what’s on your wish list for your next home? And what’s your price range? Let’s discuss your options with the McT Real Estate Group and explore the possibilities that San Diego’s current market has to offer.

Why Multi-Generational Living by the Sandwich Generation

San Diego Economy Affects Mortgage Rates

If you are thinking of buying or selling a house in San Diego, you’re likely keeping a close eye on mortgage rates and wondering about future trends. Understanding what drives these rates is crucial for making informed decisions. A key factor influencing mortgage rates is the Federal Funds Rate, which determines how much it costs banks to borrow money from each other. Although the Federal Reserve (often referred to as the Fed) doesn’t directly set mortgage rates, it controls the Federal Funds Rate, which affects mortgage rates.

This connection is why many are closely monitoring the Fed’s actions, anticipating potential decreases in the Federal Funds Rate. Such decreases generally lead to lower mortgage rates. The Fed’s upcoming meeting next week will be pivotal as they assess several critical economic indicators:

  • Inflation Rate: The current pace at which prices for goods and services rise.
  • Job Creation: The number of new jobs being added to the economy.
  • Unemployment Rate: The percentage of the workforce that is currently unemployed.

Here’s the latest data on these three essential metrics and how they might impact mortgage rates in San Diego and other parts of the country.

 Inflation and Mortgage Rates in San Diego

Over the past year or two, inflation has been a hot topic, and its effects are felt every time we make a purchase. In San Diego, as in many other places, the rapid rise in prices is unmistakable. High inflation means that prices for goods and services increase quickly, affecting the cost of living.

Inflation is Trending Toward 2% Graph by BEA
Inflation is Trending Toward 2% Graph by BEA

The Federal Reserve has been working to reduce inflation to a target rate of 2%. Although current inflation rates are still above this goal, there’s been progress in the right direction. This ongoing effort is crucial for stabilizing the economy and, consequently, the housing market in San Diego. Understanding how inflation impacts mortgage rates can help potential homebuyers and sellers make more informed decisions in this dynamic market.

San Diego’s Job Market and Mortgage Rates

The Federal Reserve closely monitors job creation each month as it plays a crucial role in economic health and decision-making about interest rates. This dynamic is particularly relevant in San Diego, a city known for its diverse economy and thriving job market. The Fed aims to see a steady slowdown in job growth before making any changes to the Federal Funds Rate. If job creation slows, it suggests the economy remains robust but is beginning to cool down, aligning with the Fed’s objectives.

Inman mentions in a recent article:

“. . . the Bureau of Labor Statistics reported that employers added fewer jobs in April and May than previously thought and that hiring by private companies was sluggish in June.”

This trend suggests a cooling economy, even though employers continue to hire. For San Diego, this means that while businesses are still growing, they are expanding at a slower pace, which is a positive sign for economic stability.

San Diego’s job market, spanning sectors like biotech, tourism, and military, mirrors these national trends. A balanced slowdown in job growth can help stabilize mortgage rates, making it a critical factor for potential homebuyers to consider. As the economy steadies, the outlook for mortgage rates becomes clearer, offering a more predictable environment for those looking to invest in San Diego real estate.

The Impact of the Unemployment Rate

The unemployment rate measures the percentage of people actively seeking work but unable to find employment. A low unemployment rate signifies a robust job market with many residents employed, which is generally positive news for the community.

However, a thriving job market can also lead to higher inflation. When more people have jobs, they tend to spend more money, which can drive up prices. Currently, San Diego’s unemployment rate remains low but has shown a slight increase in recent months.

This gradual rise in unemployment is closely monitored by the Federal Reserve. A consistently increasing unemployment rate can be a signal for the Fed to consider lowering the Federal Funds Rate. The rationale is that higher unemployment leads to reduced consumer spending, which can help control inflation.

Understanding these dynamics is crucial for anyone interested in San Diego’s real estate market. As employment trends impact mortgage rates, staying informed can help you make better financial decisions when buying or selling a home.

San Diego’s Economy and What it Means Moving Forward?

As we move forward, it’s clear that mortgage rates will continue to fluctuate in the coming days and months. However, there are indications that the economy is heading in the direction the Federal Reserve aims for. Despite this, it’s unlikely that the Federal Funds Rate will be cut in the next meeting. Jerome Powell, Chair of the Federal Reserve, emphasized the need for more consistent data, stating:

“We want to be more confident that inflation is moving sustainably down toward 2% before we start the process of reducing or loosening policy.”

In simple terms, although we’re seeing positive signs now, the Fed needs additional data and time to ensure this trend is steady. If the economy continues in this direction, the CME FedWatch Tool predicts a 96.1% chance that the Fed will lower the Federal Funds Rate at their September meeting.

It’s important to note that the Fed doesn’t directly set mortgage rates. Nonetheless, when they decide to cut the Federal Funds Rate, mortgage rates are expected to respond accordingly. The timing of the Fed’s actions can be influenced by new economic reports, global events, and other factors. Therefore, trying to time the market is generally not advisable.

Bottom Line on How San Diego’s Economy Affects Mortgage Rates

Recent economic data suggests that there may be hope for lower mortgage rates on the horizon. In San Diego, understanding these trends is crucial for making informed decisions. Let’s connect, and we will keep you updated on the latest developments and what they mean for you. As your local real estate experts, we’re here to help you navigate the ever-changing market and find the best opportunities.

2024 Homebuyer Opportunities in San Diego

Housing Inventory 2024 vs. 2008: San Diego Housing Market

Even if you didn’t own a home in San Diego during the 2008 housing crisis, you likely remember the turmoil it caused. The crash affected countless lives, and it’s natural to worry about a repeat scenario. However, you can rest easy, as today’s market conditions and housing inventory in 2024 are vastly different from those in 2008. According to Business Insider:

“Though many Americans believe the housing market is at risk of crashing, the economists who study housing market conditions overwhelmingly do not expect a crash in 2024 or beyond.”

Experts are confident in this outlook for several reasons. For the market and home prices to crash, there would need to be an excess of houses for sale. However, the current data shows the opposite: there is an undersupply of homes, even with the inventory growth we’ve seen this year. The housing supply primarily comes from three sources:

  • Existing Homes: Homeowners deciding to sell.
  • Newly Built Homes: New home construction.
  • Distressed Properties: Foreclosures or short sales.

When we examine these sources, it’s clear that today’s market doesn’t resemble 2008. For example, the local market in San Diego has seen a steady demand for homes, supported by the area’s desirable lifestyle and economic opportunities. The supply of existing homes remains tight, new construction is carefully managed, and distressed properties are not flooding the market.

This balanced inventory in San Diego and nationwide contributes to the stability that economists and real estate experts predict. So, while it’s wise to stay informed and cautious, there’s no need to fear a repeat of the 2008 housing crash.

Homeowners Selling Their Homes in San Diego: Housing Inventory 2024

In San Diego, the supply of existing (previously owned) homes has increased compared to last year, but it remains relatively low. While this varies by local market, the national months’ supply is still well below the average and significantly lower than during the 2008 crash.

The graph below illustrates this clearly. The latest data by NAR (shown in purple) compared to 2008 (shown in green) reveals that we currently have only about one-third of the available inventory we had back then.

Average Annual Inventory of Homes for Sale Graph by NAR
Average Annual Inventory of Homes for Sale Graph by NAR

So, what does this mean for the San Diego real estate market? Simply put, there aren’t enough homes on the market to cause property values to drop significantly. For a situation similar to 2008 to occur, there would need to be a substantial increase in the number of homeowners selling their properties with very few buyers to match, and that’s not happening right now in San Diego.

This stability in the housing market is reassuring for buyers and sellers, highlighting that today’s conditions are very different from those of the past.

New Home Construction in San Diego: Stability and Growth

People are buzzing about the new home construction scene in San Diego these days, sparking curiosity about whether homebuilders are going overboard. While new homes represent a larger slice of the total housing inventory this 2024 than usual, there’s no cause for concern. Here’s why.

The graph below, based on Census data, illustrates the number of new homes built over the past 52 years. The blue sections highlight the overbuilding that occurred leading up to the 2008 crash. In contrast, the green areas show consistent underbuilding since then.

Housing Inventory this 2024 - Builders Aren't Overbuilding, They're Catching Up Graph by Census
Housing Inventory this 2024 – Builders Aren’t Overbuilding, They’re Catching Up Graph by Census

This trend is particularly evident in San Diego. Like builders across the nation, builders here have been cautious, learning from past mistakes. They are not overbuilding but simply catching up to meet the demand.

A recent article from Bankrate supports this view, stating:

“What’s more, builders remember the Great Recession all too well, and they’ve been cautious about their pace of construction. The result is an ongoing shortage of homes for sale.”

San Diego’s real estate market, therefore, is in a phase of balanced growth. Builders are strategically increasing the housing supply to meet the needs of our vibrant community without risking another bubble.

Distressed Properties in San Diego (Foreclosures and Short Sales)

Distressed properties, such as short sales and foreclosures, are another source of housing inventory. During the 2008 housing crisis, a flood of foreclosures hit the market because lenient lending standards allowed many people to secure home loans they couldn’t afford. Basically, if you had a pulse, you would be approved for a loan. It was awful and careless.

However, today’s lending standards are much stricter, leading to more qualified buyers and significantly fewer foreclosures. The graph below, using data from ATTOM, illustrates the substantial changes since the housing crash:

Foreclosure Fillings Are Very Low Bar Graph by ATTOM
Foreclosure Fillings Are Very Low Bar Graph by ATTOM

As lending standards became more stringent and buyers more qualified, the number of foreclosures began to decline. The graph also highlights that in 2020 and 2021, a foreclosure moratorium and the forbearance program helped prevent a repeat of the massive foreclosure wave seen during the last market crash.

Although headlines might suggest an increase in foreclosure volume, it’s essential to remember this rise is only in comparison to recent years with minimal foreclosures. We are still below the typical foreclosure levels observed in a normal year.

San Diego, known for its robust housing market, has benefited from these tighter lending standards. The local market remains stable, with fewer distressed properties contributing to inventory. This stability helps maintain property values and supports a healthier real estate environment in the region.

What This Means for You

In San Diego, the housing inventory at the 2024 levels is far from reaching the point where home prices would significantly drop or lead to a market crash.

According to Forbes:

“As already-high home prices continue trending upward, you may be concerned that we’re in a bubble ready to pop. However, the likelihood of a housing market crash—a rapid drop in unsustainably high home prices due to waning demand—remains low for 2024.”

Mark Fleming, Chief Economist at First American, emphasizes the basic laws of supply and demand, explaining why a crash is unlikely:

“There’s just generally not enough supply. There are more people than housing inventory. It’s Econ 101.”

Similarly, Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), reassures:

“We will not have a repeat of the 2008–2012 housing market crash. There are no risky subprime mortgages that could implode, nor the combination of a massive oversupply and overproduction of homes.”

In the context of San Diego, this is particularly relevant. The city’s desirable location and thriving economy continue to attract new residents, keeping demand high. The limited inventory, coupled with strict lending standards, means that the housing market remains stable. So, if you’re considering buying or selling a home in San Diego, rest assured that the market fundamentals are strong, and a crash is not on the horizon.

Bottom Line on the Housing Inventory 2024 vs. 2008

In San Diego, the housing inventory in 2024 is showing signs of stability that we didn’t see back in 2008. Today, there simply aren’t enough homes for sale to trigger a crisis like we saw back then. With inventory levels remaining low, there is no indication that this trend will change in the near future. Therefore, housing experts and current inventory data consistently indicate that a market crash is not on the horizon.

San Diego’s unique market dynamics, including its desirable location and consistent demand, further support this outlook. Whether you’re buying or selling, it’s reassuring to know that the local market is on solid ground.
For any real estate needs in San Diego, contact the McT Real Estate Group. We’re here to help you navigate the market with confidence and expertise.

Prioritize Time in the Market: Maximize Returns in San Diego

2024 Mid-Year Forecast on the San Diego Housing Market

As we transition into the second half of 2024, let’s take a closer look at what experts predict for the San Diego housing market. Expect changes in home prices, mortgage rates, and the pace of home sales. San Diego, with its beautiful coastline, vibrant communities, and desirable climate, continues to be a hot spot for real estate. As we move forward, keeping an eye on these 2024 Mid-Year Forecasts, key factors will be crucial for buyers and sellers.

San Diego Home Prices Expected to Climb Moderately in 2024

Home prices in San Diego are forecasted to rise at a more typical pace this year. According to the latest data from seven of the most trusted sources in the industry, home prices will continue their upward trend.

2024 Mid-Year Forecast - Mortgage Rates Predictions 2024 Chart
2024 Mid-Year Forecast – Mortgage Rates Predictions 2024 Chart

Why will home prices keep appreciating? The answer lies in the supply of homes for sale. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), explains:

“One thing that seems to be pretty solid is that home prices are going to continue to go up, and the reason is that we don’t have housing inventory.”

Although inventory has increased compared to the past couple of years, it remains low overall. This limited supply of homes will keep pushing prices up. If you’re thinking of buying a home in San Diego, the good news is you won’t face the dramatic price hikes seen during the pandemic. However, prices aren’t expected to drop. They will continue to climb, albeit at a slower pace.

Entering the market sooner rather than later could save you money in the long run. Plus, experts agree that your home will appreciate in value after you buy it, making it a sound investment. As demand remains high and supply stays limited, this desirable city will likely see continued growth in home values.

Good News for San Diego: Mortgage Rates Set to Decrease

According to predictions from Fannie Mae, the Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR), mortgage rates will decrease slightly in the coming months. This is excellent news for both buyers and sellers in San Diego.

2024 Mid-Year Forecast - Mortgage Rates Predictions 2024 Chart
2024 Mid-Year Forecast – Mortgage Rates Predictions 2024 Chart

When purchasing a home, even a small drop in mortgage rates can significantly reduce your monthly payments. For sellers, lower rates are likely to attract more buyers, increasing the chances of selling your property faster and potentially at a higher price. If you’ve been hesitant to sell due to the current rates, this upcoming change might be the encouragement you need.

San Diego’s vibrant housing market stands to benefit from these lower mortgage rates. With its beautiful weather, diverse neighborhoods, and thriving local economy, more affordable borrowing costs will make it easier for many to buy a home in this sought-after city. This shift can also energize the market, bringing new opportunities for buyers and sellers to achieve their real estate goals.

San Diego Housing Market: Home Sales Expected to Hold Steady in 2024

The housing market in San Diego is projected to remain stable throughout 2024, with the number of home sales expected to match or slightly exceed last year’s figures. This trend is based on forecasts from Fannie Mae, the Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR). Last year, 4.8 million homes were sold nationwide, and this year’s forecasted average is around 5 million, indicating a modest increase.

2024 Home Sales Forecasts bs 2023 in Millions Bar Graph Comparison
2024 Home Sales Forecast bs 2023 in Millions Bar Graph Comparison

Lawrence Yun, the Chief Economist at NAR, sheds light on the reasons behind this trend. He states:

“Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales.”

This means more opportunities for people looking to buy or sell their homes in the beautiful neighborhoods of San Diego. If you’re considering a move this year, now is a great time to take advantage of these favorable conditions. Let’s work together to ensure you find the perfect home or sell your current one with ease.

Conclusion of the 2024 Mid-Year Forecast on the San Diego Housing Market

If you have any questions or need assistance navigating the San Diego real estate market, don’t hesitate to contact the McT Real Estate Group. San Diego’s housing market can be complex, but with our expertise, we can help you make informed decisions. Our team is here to support you every step of the way. Contact us today to discuss your real estate needs and the 2024 Mid-Year Forecast, and take advantage of our local knowledge and professional guidance.

Selling Your House in San Diego: Common Questions

Presidential Election Impact on San Diego Real Estate

With the 2024 Presidential election just around the corner, many in San Diego are wondering if this political event will influence the housing market. If you’re considering buying or selling a home, this is a crucial question to address. Buying or selling a home is a significant decision, and it’s important to understand how major events like elections could impact your plans. In San Diego, the housing market has shown only minor, short-term changes during past Presidential elections.

Historically, election periods have brought slight fluctuations in home sales, prices, and mortgage rates. Here’s an overview of what typically happens in the market during these times and what you can expect as the election approaches.

Home Sales and Presidential Elections in San Diego

During the month of November, when a Presidential election takes place, home sales typically experience a slight slowdown. Ali Wolf, Chief Economist at Zonda, explains:

“Usually, home sales are unchanged compared to a non-election year with the exception being November. In an election year, November is slower than normal.”

This slowdown happens because some people feel uncertain and hesitant about making big decisions during such a pivotal time. However, it’s important to note that this slowdown is temporary. Historically, home sales bounce back in December and continue to rise the following year.

Here in San Diego, our vibrant real estate market is known for its desirable neighborhoods like North Park and South Park; this trend is also noticeable. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows that after nine of the last eleven Presidential elections, home sales increased the following year.

The graph below illustrates annual home sales since back in the year of 1978, with each Presidential election year marked in pink. The year immediately after each election is shown in green if existing home sales rose, while the two blue bars represent the only years when home sales decreased after an election.

Home Sales Went Up After 9 of the Last 11 Presidential Elections
Home Sales Went Up After 9 of the Last 11 Presidential Elections

This historical pattern reassures buyers and sellers in San Diego that any election-related slowdown in the housing market is usually short-lived, with a strong rebound expected in the subsequent months.

Home Prices During Election Years

Have you ever wondered about home prices during election years? Do they tend to drop? Generally, the answer is no.
According to residential appraiser and housing analyst Ryan Lundquist:

“An election year doesn’t alter the price trend that is already happening in the market.”

In San Diego, the housing market mirrors this resilience. The latest data from the National Association of Realtors (NAR) indicates that following seven out of the last eight Presidential elections, home prices increased the subsequent year.

Home Prices Went Up After 7 of the Last 8 Presidential Elections Graph by NAR
Home Prices Went Up After 7 of the Last 8 Presidential Elections Graph by NAR

The accompanying graph illustrates this trend, with election years highlighted in pink. The sole instance when prices declined post-election is marked in blue, which occurred during the housing market crash—a highly unusual period. Today’s market conditions are vastly different from that time.

All the purple bars depict periods when prices rose in the year following an election. Therefore, if you’re concerned about your home losing value due to an election, rest assured that, in most cases, home prices tend to rise after Presidential elections. This pattern is particularly evident in stable and thriving markets like San Diego.

Mortgage Rates During Election Years

Mortgage rates significantly influence your monthly payments when buying a home. According to Freddie Mac, in eight out of the last eleven Presidential election years, mortgage rates have dropped between July and November. This pattern indicates that election periods often bring lower mortgage rates.

Mortgage Rates Decreased Leading Up to 8 of the Last 11 Presidential Elections Table from Freddie Marc
Mortgage Rates Decreased Leading Up to 8 of the Last 11 Presidential Elections Table from Freddie Marc

Current forecasts predict a slight decrease in mortgage rates for the remainder of the year. If these forecasts are accurate, we might see this trend continue. For prospective homebuyers in San Diego, this is encouraging news. Lower mortgage rates translate to reduced monthly payments, making homeownership more accessible in our vibrant city.

San Diego’s real estate market is dynamic, and understanding mortgage trends can help you make informed decisions. Whether you’re eyeing a cozy condo in North Park or a family home in South Park, staying updated on mortgage rates can save you money and stress in the long run. If you’re planning to buy a home in the coming months, keep an eye on these trends and contact us, the McT Real Estate Group, your local real estate experts, to navigate the market effectively.

What This Means for You

So, what does this mean for you? Presidential elections might influence the housing market, but these changes are usually minor and short-lived.

According to Lisa Sturtevant, Chief Economist at Bright MLS:

“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”

In San Diego, this holds true as well. Our local real estate market remains robust, with only slight fluctuations around election times. For most buyers and sellers in San Diego, the election doesn’t drastically alter their plans. Whether you’re looking to buy a charming home in North Park or sell a condo in South Park, the overall impact of elections on your decision-making process will be minimal.

Focus on your real estate goals and trust that the San Diego market remains stable, even during election years.

Conclusion

During an election year, it’s normal to feel some uncertainty about the housing market. However, historical trends indicate that the market remains strong and resilient regardless of political changes. If you need assistance navigating the San Diego housing market, whether during an election year or any other time, the McT Real Estate Group is here to help. Let’s connect and ensure you make informed decisions for your real estate needs. San Diego’s vibrant neighborhoods and desirable lifestyle make it a great place to buy or sell a home, no matter the political climate.

Investor Home Buyers in San Diego

June Home Sales in San Diego: What to Expect

June is one of the busiest months in the housing market, with many people buying and selling homes. San Diego, known for its beautiful weather and vibrant communities, sees a lot of real estate activity and home sales during this time. If you’re planning a move this June, it’s essential to be well-prepared. Here’s a quick guide to help you navigate the process smoothly and make informed decisions.

If You’re Buying a Home in San Diego This June

June is a popular month for homebuyers, especially for families with children who want to move between school years. San Diego’s real estate market heats up during this time, with more buyers actively searching for homes. This means you’ll likely face more competition. However, there’s a silver lining: more sellers tend to list their homes now, giving you more options to choose from.

According to Bankrate, late spring and early summer are the busiest and most competitive times in the real estate market.

“Late spring and early summer are the busiest and most competitive time of year for the real estate market. There’s usually more inventory listed for sale than other times of year . . . This is a double-edged sword for a buyer, as you will be met with more opportunities but [also] much more competition.”

In this bustling market, working with a trusted real estate agent is crucial. Your agent can help you stay on top of the latest listings, provide expert advice on making strong offers, and ensure you understand the true value of the homes you’re considering. As Forbes highlights:

“Approaching the market confidently, armed with good information and grounded expectations will take you far. Don’t let the hustle of the market convince you to buy something that’s not in your budget, or not right for your lifestyle.”

Selling Your Home This June in San Diego

If you’re considering selling your home in San Diego this June, you’re in a prime position. The summer season attracts a higher number of motivated buyers, many eager to move before the new school year begins. These buyers are often willing to put in strong offers to ensure their plans stay on track. As a result, if your home is well-presented and priced at market value, you may experience a faster sale or even receive a higher price.

San Diego’s appeal, with its beautiful weather and excellent schools, makes it a hotspot for homebuyers during this time. According to the National Association of Realtors (NAR), warmer weather and the end of the school year spur more people to buy and sell. This creates increased competition among buyers, driving up home prices.

“Warmer weather and the end of the school year encourage more people to buy and sell, respectively. Buyers are looking to move and settle before the new school year begins, contributing to increased competition and, consequently, higher prices.”

Having a great real estate agent is crucial during this busy season of June. They can help navigate offer contingencies and handle negotiations to secure the best deal for you. Discussing closing dates with your agent is essential, as buyers may need to adjust based on their timelines. For instance, buyers with school-aged children might need to delay closing until the end of the current school year or may seek a quicker move-in date if they’re purchasing later in the summer. As U.S. News Real Estate explains:

“ . . if your house goes under contract in early summer, the buyer may ask for a delay in closing or move-in until the school year finishes or their current home has sold. Alternatively, a buyer later in summer may be looking to close quickly and move in under a month. Remain flexible to keep the deal running smoothly, and your buyer may be willing to throw in concessions, like covering some of your closing costs or overlooking the old roof.”

Flexibility is key to keeping the sale process smooth. By being adaptable, you can accommodate buyer needs and potentially receive concessions in return, such as covering some closing costs or overlooking minor home repairs. Selling your home in San Diego this June presents a fantastic opportunity. With the right preparation and a skilled agent, you can take full advantage of our market and secure a favorable sale.

Bottom Line

Are you thinking about those June Home Sales and making a move in San Diego? Let’s chat so you can be fully prepared for what to expect. We’ll create a plan tailored to your needs, considering the current market conditions and trends specific to San Diego. With its beautiful weather, diverse neighborhoods, and vibrant culture, San Diego is a fantastic place to buy or sell a home. We’ll ensure the process is smooth and fits your unique situation. Reach out to our team, the McT Real Estate Group, today, and let’s make your real estate goals a reality!

More Homes on the Market in San Diego: What You Need to Know!

Real Estate Market Update in San Diego: Home Sales Trends

What’s with all the doom and gloom? Here is a fresh look at the real estate market update in San Diego. Today, we’re tackling some common myths that have been swirling around social media.

It’s easy to get caught up in all the negative chatter online—with all of the different social media platforms that are full of doom and gloom predictions about real estate. From tales of bubbles about to burst to the threat of foreclosures and price collapses, these stories are everywhere, and they’re getting a ton of attention.

A Real Estate Market Update: Overview of Current Market Conditions

Now, let’s be clear: fear does sell. But it’s important to question who benefits from these scary stories on the real estate market update. Many of these viral tales come from folks without real expertise in the real estate economic world, yet they’ve managed to capture the eyes of millions. Unfortunately, this has led some potential homebuyers to wait on the sidelines, hoping for a crash that could let them jump into the market.

This takes me back to 2009 -2010. I remember being at several of our open houses in North Park; while there was lots of negativity and hardships going on in the real estate world during that time, I remember specifically a couple who would come to all of our open houses. We chatted for a while, and I remember them saying they were going to see how things worked out. They believed the market was going to come down further than what it was at that time. Well, I can tell you that as the years went by, this same couple would go to most of the open houses that we have in North Park.

Year after year. I didn’t see them for a while, so I figured they finally found a home. Well, guess what? I was hosting one of our open houses in the Morley Field neighborhood in North Park back in 2023, and they came in. We chatted for a while, and it turns out they ended up not buying. They waited all of those years, paying someone else’s mortgage, and the prices went nuts.  I haven’t seen them in a while and I think they may have moved away. I felt bad for them because they lost out on a huge opportunity. 

Market Shifts and Price Increases

So now let’s move on..  Since the rollercoaster ride starting in 2020 through the unexpected twists of the pandemic, home prices have been a hot topic. We saw a dramatic spike, then a shift as mortgage rates rose in the second half of 2022, yet prices have continued to climb. For many, the dream of homeownership seems tough to reach. And for many, unfortunately buying in San Diego has become out of reach.

But this is where we need to cut through the noise and focus on what’s actually happening. It’s time to move past the myths and look at the facts. Understanding the true dynamics of our market is crucial, especially if you’re thinking about buying or selling soon.

Remember, it’s all about staying informed and making smart decisions based on real data, not just headlines. So, if you’re ready to get a clear picture of what’s really going on and how it affects your home-buying or home-selling decisions here in San Diego, stick around. Let’s dive deep and debunk some myths together.

Increase in Active Listings

Over the past few weeks, we’ve seen our active listings jump up by 284 homes, which is an 8% increase, bringing our total to 3,672 properties on the market. Interestingly, we noticed a significant shift this April—34% fewer homes were listed than in our pre-COVID years, (2017-219) which is 1,685 fewer homes. But, compared to last April, we’ve got 868 more sellers jumping into the market.

Real Estate Market Update - San Diego Active Listing Inventory
Real Estate Market Update – San Diego Active Listing Inventory

Detailed Look at Market Demand

Now, let’s talk about demand. In the last two weeks, the number of homes under contract dropped slightly by 23, a 1% decrease, leaving us with 1,933 pending sales. This is still a bit higher than last year’s figures around this time, which stood at 1,857.

Real Estate Market Update - San Diego County Demand Graph
Real Estate Market Update – San Diego County Demand Graph

Market Time by Price Segments

Market time has also shifted a bit. It’s taking a little longer to sell homes now, with the expected market time increasing from 52 days to 57 days over the last couple of weeks. This time last year, homes were moving faster, with the market time at just 36 days. Here in North Park, South Park, and in our nearby neighborhoods of San Diego, we are seeing a slowdown because buyers have a little more to choose from. So here is some advice for all new sellers coming on the market. This is not the time to test the market. Price it right and price it right from the get-go. Because if you don’t you will only be helping your competition sell their home before yours.

San Diego County Expected Market Time
San Diego County Expected Market Time

Looking at different price ranges, homes below $750,000 are now expected to sell in about 54 days, up from 49. For homes priced between $750,000 and $1 million, market time has crept up a bit from 39 days to 41. And as we go up the price ladder of price, the time increases as well, especially in the luxury market—homes above $2 million are now taking between 93 to 147 days to sell. And if you think that seems like a long time, those homes above $6 million are taking approximately 400 days or so to sell.

San Diego County Expected Market Time Over Year
San Diego County Expected Market Time Over Year

Thankfully, distressed properties like foreclosures and short sales remain a minimal part of our market, making up just 0.4% of all listings and demand. There are only 16 distressed homes available right now, which is a small increase from last year.

Conclusion and Market Outlook on the San Diego Real Estate Market Update

And to wrap up, here’s a bit of good news—April was a strong month for sales. In San Diego, we closed 2,095 residential sales, which is 6% higher than last April, and we even saw a slight increase from March. Most of these sales were traditional, with homeowners having equity in their homes—only a very small handful were foreclosures or short sales.

San Diego County Closed Sales Year over Year
Real Estate Market Update – San Diego County Closed Sales Year over Year

And like always, if you have any real estate related questions, whether you’re thinking of selling your home in North Park, South Park or any part of San Diego County or thinking a buying a home. Reach out to us. I’m Z with the McT Real Estate Group. Our team is hear to help and guide you with your real estate needs.

Home Prices and Mortgage Rates in San Diego: What’s Next?

Investor Home Buyers in San Diego

Are Big Investors Really Buying Up All the Homes Today in San Diego?

If you’re thinking of buying a house in San Diego, you might wonder if big investor home buyers are snatching up all the homes. Maybe you’ve read about it or seen social media reels suggesting that investor activity is making it harder for the average buyer. However, there’s a lot of misinformation out there. Let’s clear things up and look at what’s happening. The peak of big investor activity is actually behind us.

The Wall Street Journal explains:

“Investors of all sizes spent billions of dollars buying homes during the pandemic. At the 2022 peak, they bought more than one in every four single-family homes sold, though more recently their activity has slowed as interest rates rose and supply became tighter.”

The Reality of Investor Activity

The key takeaway is that investor activity has slowed significantly. Even during the peak of investor buying, three out of every four single-family homes were purchased by regular buyers, not investors. Additionally, most investors over the past few years were not the big corporations you might hear about. The majority were small, mom-and-pop investors—people like your neighbors who own just a few properties, maybe only their main residence and a vacation home.

Now, let’s focus on the large mega-investor firms since they’re often the subject of social media discussions. Mega investors are those who own over 1,000 properties. Surprisingly, according to the Wall Street Journal, these firms don’t buy many homes. During the peak in 2022, they purchased about 2% of available single-family homes. Recently, this percentage has dropped even more, becoming negligible.

Mega Investors Are Not Buying All the Homes Bar Graph from WSJ
Mega Investors Are Not Buying All the Homes Bar Graph from WSJ

To understand why this percentage is decreasing, private lender RCN Capital asked investors about their challenges. Jeffrey Tesch, CEO of RCN Capital, found:

“Investors are already facing many challenges in today’s housing market – rising prices, limited inventory, and higher financing costs.”

The Impact on the San Diego Housing Market

These challenges highlight that big investors are not taking over the housing market. So, don’t believe everything you hear. They aren’t buying all the homes, which makes it impossible for regular people to purchase properties.

In San Diego, this trend is particularly relevant. With its desirable neighborhoods and competitive market, it’s essential to understand the real dynamics at play. Despite the noise, regular buyers still dominate the San Diego housing market. Keep this in mind as you navigate your home-buying journey.

Bottom Line

Big investors aren’t buying up all the homes in the market. While investor activity has increased, there’s still a healthy mix of buyers, including families and individuals looking for their dream homes in San Diego. The local market remains diverse and competitive, offering plenty of opportunities for all types of buyers.

If you’re curious about what you’ve been hearing regarding the housing market, let’s talk. The McT Real Estate Group is here to provide clarity and help you understand the current trends and dynamics in San Diego’s real estate scene. Whether you’re considering buying or selling, We can offer the insights you need to make informed decisions. Let’s chat and get to the heart of what’s really happening in our vibrant market.

Life in San Diego: Are People Really Leaving ?

Home Prices and Mortgage Rates in San Diego: What’s Next?

If you’re considering making a move this year in San Diego, you’re likely wondering about the moving costs to consider as well as home prices and mortgage rates. This may have you thinking of what the future holds for all of these and whether it’s better to move now or wait.

Making a well-informed decision is key, and that means relying on the latest information available. Let’s take a closer look at what experts are saying about home prices and mortgage rates. With San Diego’s unique housing market dynamics, understanding these trends can help you navigate your next move more confidently.

Experts predict that home prices in San Diego may grow moderately due to the area’s strong demand and limited supply. This means you might face higher prices if you wait too long. On the other hand, mortgage rates are expected to fluctuate, so keeping an eye on them is crucial.

By staying updated on these trends, you can make a more informed decision about whether to buy now or wait. Remember, the San Diego real estate market has its own unique characteristics, and being aware of these can give you an edge in your home-buying journey.

What’s Next for Home Prices?

If you’re wondering about the future of home prices, the Home Price Expectations Survey from Fannie Mae is a trustworthy source. This survey includes insights from over one hundred economists, real estate experts, and market strategists.

According to the latest survey, experts predict home prices will keep rising at least through 2028. Although the rate of appreciation will vary each year, the overall trend indicates an increase in prices for the next five years, moving at a more stable and normal pace.

Home Prices Will Rise Over Next 5 Years Bar Graph by HPES
Home Prices Will Rise Over Next 5 Years Bar Graph by HPES

For those considering a move in San Diego, this means now might be the right time to buy. Purchasing a home today could lead to an increase in your home’s value and equity in the coming years. On the other hand, if you decide to wait, you might pay more as home prices continue to rise.

San Diego’s real estate market, known for its beautiful coastal views and vibrant neighborhoods, makes it a desirable place to live. As demand remains high, the likelihood of price increases is significant. Therefore, securing a home in San Diego now promises a valuable investment and the chance to enjoy all the perks of living in this sought-after city.

Don’t miss out on the opportunity to benefit from the projected rise in home prices. Take advantage of the current market conditions and invest in your future today.

When Will Mortgage Rates Come Down?

This is the million-dollar question in the real estate industry. Predicting mortgage rates is challenging because multiple factors contribute to the current volatility. Odeta Kushi, Deputy Chief Economist at First American, explains it well:

“Every month brings a new set of inflation and labor data that can influence the direction of mortgage rates. Ongoing inflation deceleration, a slowing economy, and even geopolitical uncertainty can contribute to lower mortgage rates. On the other hand, data that signals upside risk to inflation may result in higher rates.”

In San Diego, where the real estate market is particularly dynamic, these factors play a crucial role. The city’s desirable location, booming economy, and attractive lifestyle options make it a focal point for housing market trends.

What happens next will depend on how these variables unfold. Experts remain optimistic that rates will decline later this year. However, they acknowledge that changing economic indicators will continue to impact rates. As a CNET article notes:

“Though mortgage rates could still go down later in the year, housing market predictions change regularly in response to economic data, geopolitical events, and more.”

For San Diego homebuyers, it’s important to stay informed. If you’re ready, willing, and able to afford a home now, partner with a trusted real estate advisor. They can help you navigate the market, weigh your options, and make the best decision for your circumstances.

Stay ahead of the curve by keeping an eye on market updates and working closely with a knowledgeable advisor. San Diego’s real estate landscape is always evolving, and being prepared will give you the best chance to secure your dream home.

Bottom Line on Home Prices & Mortgage Rates in San Diego

Let’s connect to ensure you have the latest updates on San Diego home prices and mortgage rate expectations. With the real estate market constantly evolving, staying informed is crucial. We’ll discuss what the experts predict, helping you make a well-informed decision on your next move. San Diego’s housing market has unique trends and opportunities, and we’re here to guide you through it all. Whether buying or selling, we aim to provide you with the best advice and support. Reach out to the McT Real Estate Group today, and let’s navigate the San Diego real estate landscape together.

San Diego Market Forecast: Real Estate Headed for a Downturn?

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Z.McT-Contreras
Mary McTernan
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TXR Homes Inc.

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