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Housing Market Numbers are Out for this month and San Diego has lost up to 20% in some areas

The spring housing market was dealt a heavy blow in San Diego County in March, with prices plunging up to 20% within weeks. Experts and analysts are dissecting the situation and trying to pinpoint the root cause. As a home buyer, seller or owner, it's essential to understand how this sudden slump affects you. In this post, we'll evaluate the situation with an overview of the market and discuss what the future holds.


To grasp the situation correctly, let's take a closer look at the facts. According to the San Diego Association of Realtors, March saw a 2.6% drop in median home prices across the county. The majority of the decline was in detached single-family homes. This change is a stark contrast to the rising demand and record home sales of the past year. Surprisingly, despite the gloomy numbers, inventory continues to be incredibly low - a sign that many homeowners are not listing their homes.


Zip codes in San Diego can provide a revealing window into where the most significant declines have occurred. In North County San Diego, Rancho Bernardo has experienced a sharp downturn in detached single family home prices following an impressive three-year surge. The area’s median house values have dropped by 22%.


People looking for a home in Carlsbad 92008 may find that while detached homes have seen a notable 15.3% drop in prices, attached properties are actually on the rise with an impressive 4.8% increase!



This time last year, nearly 1,300 homes were available for sale - a stark contrast to today's market of just over 670 listings. It appears that the real estate sector has seen a dramatic decrease in inventory within this 12 month period.


National Housing Market


Nationally, existing home sales jumped 14.5% month-over-month as of last measure, the first monthly gain in 12 months, and representing the largest monthly increase since July 2020, according to the National Association of REALTORS® (NAR). The sudden uptick in sales activity stems from contracts signed toward the beginning of the year, when mortgage rates dipped to the low 6% range, causing a surge in homebuyer activity. Pending sales have continued to improve heading into spring , increasing for the third consecutive month, according to NAR.


Monthly sales might have been even higher if not for limited inventory nationwide. At the current sales pace, there were just 2.6 months’ supply of existing homes at the beginning of March, far below the 4 – 6 months’ supply of a balanced market. Inventory remains suppressed in part because of mortgage interest rates, which nearly hit 7% before falling again in recent weeks. Higher rates have continued to put downward pressure on sales prices, and for the first time in more than a decade, national home prices were lower year-over-year, according to NAR, breaking a 131-month streak of annual price increases


Growth of new listings shrinks as more sellers are holding off


New listings continued to fall in March, dropping nearly half (47.3%) as much as the same month of last year. Typically, the trend of new listings and inventory starts picks up at the end of the first quarter to kick off the spring home buying season. However, new listings across all regions and all price ranges have slowed significantly since late last year. For the last five months, nearly two-fifths of REALTORS® on average have expressed having clients holding back from selling. With mortgage interest rates remaining nearly twice as high as last year’s levels, many sellers are reluctant to part ways with their low-interest-rates that they locked in prior to the Fed’s aggressive rate hikes that started in early 2022.


The situation may not be all negative, as it can be an ideal opportunity for potential buyers to make a deal. The sudden declines in the San Diego Housing Market are concerning, but it doesn't mean the end of an era in real estate. As a homebuyer, seller, or owner, it's crucial to stay informed and take the chances presented in any arising scenarios. The current setback in the housing market could create both challenges and opportunities for homeowners and buyers alike. In conclusion, the San Diego housing market is undergoing a tremendous shift, and in the near future, it might lead to a more stable and stronger market, offering valuable opportunities for homebuyers and sellers.



Tristen Campanella is a top producing, Holistic Realtor in San Diego. She has helped hundreds of families buy, sell and invest with their best interests at heart.



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