San Diego County Market Update Jan 2023
SAN DIEGO COUNTY MARKET UPDATE
Year over year, the inventory has slightly increased, but we are still experiencing a low supply of homes for sale. This, combined with a strong reduction in buyer demand due to multiple rate hikes last year between May and December, has resulted in price declines in most areas from their peak of May-June 2022 (about $100,000 on average Countywide, about -14%). As of December 2022, prices are approximately back to the same as December 2021. However, we are seeing definite signs that the market will likely experience strong activity and price gains in the near future. Mortgage rates have dropped to the lowest levels recorded in months and buyer activity is picking up!
For Buyers:
About rates: “The mortgage market continues to respond positively to the improvements we have seen on inflation, in turn we are seeing a sharp turn (for the better) in the housing market! Over the past few weeks we have seen inflation come down, mortgage rates have followed. In the last two weeks rates have improved almost .5%! Who doesn’t like hearing that? Mortgage rates are now in the high 5’s, a nice improvement from the high 7’s two months ago.” (Eric Bibel, Neo Home Loans).
Spring 2022 was a very difficult and competitive time for buyers to acquire a home, with low inventory and bidding wars on a majority of the properties. Buyers have a great opportunity now to secure a lower mortgage interest rate than in the fall of 2022, most often avoiding bidding wars, and at prices much lower than spring 2022. There are also buy down programs available to permit mortgage rates in the 4’s or even the 3’s, and some sellers may be willing to pay for them as an incentive.
Buyers might want to take action now before the potential buying frenzy begins as rates lower even more. San Diego County remains one of the most desirable places to live and the lack of housing supply is likely to remain for years to come, creating upward pressure on prices. We welcome the opportunity to discuss your needs and best strategy for success.
For Sellers:
There is a tight inventory in most categories, which is an opportunity for sellers to face less competition before the typical spring rise in new listings.
We have seen an increase in activity in the last few weeks, and weekly indicators show positive trends on contracts written, new escrows opened and a stabilization of prices, potentially ending the downward pressure. Indicators show an inventory drop in the last few weeks, and less price adjustments necessary to get under contract–from 40% of properties experiencing price reductions in Nov/Dec 2022 to less than 25% mid January 2023.
If you are considering a move, we welcome the opportunity to meet and discuss the perfect timing and marketing strategies for the successful sale of your property.
