If you’ve been following the housing market in recent years, you’ve likely noticed that sellers have held a strong advantage. However, with the increasing inventory, we may start to see a shift in the market dynamics. As the number of available homes in San Diego rises, buyers could gain more leverage, potentially leading to a more balanced real estate market. Understanding these changes is crucial for anyone looking to buy or sell in the San Diego area. Here’s what you need to know to stay ahead in this evolving market.
What Is a Balanced Real Estate Market?
A balanced market is typically defined as a real estate environment where the supply of homes for sale matches the demand, usually with about a five-to-seven-month inventory. In such a market, neither buyers nor sellers hold a distinct advantage. Home prices tend to stabilize, and the variety of available properties gives buyers more options. For many years, San Diego, like much of the nation, has experienced a strong seller’s market, where sellers have had the upper hand. A shift towards a balanced market would be a significant change, offering a more level playing field for both parties. But the real question remains—are we truly heading in that direction?
As the year began, the national housing market was operating with a three-month supply of homes. However, recent trends show an increase to a four-month supply. While this may seem like a small shift, it’s a step toward a more balanced market. It’s crucial to understand that this increase in inventory doesn’t signal an impending market crash. Despite the recent growth in supply, we are far from having an oversupply that could lead to such a scenario.
In San Diego, the local market has mirrored these national trends. Inventory levels have risen slightly, yet the market remains competitive. The following graph, based on data from the National Association of Realtors (NAR), illustrates how inventory has fluctuated over the years, giving insight into the current state of the market.
At this point, San Diego remains in seller’s market territory, though it’s not as intense as in previous years. As Mark Fleming, Chief Economist at First American, wisely notes:
“The faster housing supply increases, the more affordability improves and the strength of a seller’s market wanes.”
This shift, while gradual, signals a possible transition towards a more balanced market, which could be a welcome change for those looking to buy or sell in San Diego.
What A Balanced Real Estate Market Means for You and Your Move
Understanding how this market shift affects you is crucial as you prepare to buy or sell in San Diego. The real estate landscape is evolving, and this will influence the conditions you encounter during your move. According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR):
“Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”
To provide a clearer picture, the graphs below showcase the latest data from NAR and Realtor.com, highlighting these emerging trends. In San Diego, these national trends may manifest differently, but they are important to consider as you navigate the local real estate market.
Homes are Spending More Time on the Market
As the number of homes for sale increases, properties are taking longer to sell. In San Diego, where the market has been competitive, this shift is giving buyers a bit more breathing room to find the perfect home without feeling rushed. On the other hand, if you’re selling, it’s crucial to set a realistic price from the start. Overpricing could push potential buyers towards more attractively priced homes, making it harder for your property to stand out. By pricing your home appropriately, you’ll improve your chances of a quicker sale, even in this changing market.
Home Sellers Are Receiving Fewer Offers
If you’re selling a home in San Diego, you may find yourself needing to be more flexible with your asking price or terms to successfully close the deal. This shift to a balanced market means that sellers might need to adjust their expectations, as multiple offers are becoming less common. On the flip side, if you’re a buyer in San Diego, this could work to your advantage. With more homes available and fewer bidding wars, you may have the opportunity to take your time, explore your options, and potentially negotiate a better deal. This evolving market landscape offers a different dynamic, where both sellers and buyers need to adapt their strategies.
Fewer Buyers Are Waiving Inspections
As the San Diego balanced real estate market starts, buyers will find themselves with more negotiation power. This increased leverage means that fewer buyers are willing to waive inspections, ensuring that any potential issues with a property are addressed upfront. For sellers, this trend highlights the importance of being prepared to negotiate and handle repair requests. Addressing these concerns promptly can be crucial to keeping the sale on track and ensuring a smooth closing process. In San Diego, where the market dynamics are always evolving, staying adaptable is key to successful transactions.
How a San Diego Real Estate Agent Can Assist You
While national trends give us a broad overview, the real estate market can look quite different at the local level, especially here in San Diego. The amount of available inventory, for instance, can vary significantly from one neighborhood to another. That’s why it’s crucial to rely on a knowledgeable local real estate agent who can provide a clear understanding of how your specific area compares to the broader market.
Whether you’re looking to buy or sell, staying informed about market shifts is a game-changer. A skilled agent in San Diego not only has access to the latest data but also possesses deep local insights that help you make well-informed decisions. They’ll guide you through the nuances of the market, ensuring you’re always a step ahead in your real estate journey.
Bottom Line on San Diego Entering a Balanced Real Estate Market
The real estate market is constantly evolving, especially in a dynamic city like San Diego. As we move closer to a balanced market, staying informed is more crucial than ever. Whether you’re thinking of buying a new home or selling your current one, understanding these shifts can give you a significant advantage. If you have any questions or are looking for expert guidance tailored to San Diego’s unique market, the McT Real Estate Group is here to help. Don’t hesitate to reach out; we’re just a call or click away.