The Pulse of San Diego Real Estate: Key Trends in Our Weekly Market Report
January 29th, 2023
This week in San Diego Real Estate News, mortgage rates have ticked down slighly. The Fed is expected to not make any big changes during this week's meeting. Experts do agree they expect to see mortgage rates come down through out 2024. Zillow predicts we will see mortgage rates in the low 6% towards the second half of this year.
Elizabeth Warren, the Massachusetts senator and three of her counterparts wrote a letter to Federal Reserve Chair Jerome Powell ahead of the central bank’s meeting this week, expressing concern about “the current state of the housing market and ongoing concerns that high interest rates have aggravated the country’s persistent crisis of housing access and affordability.”
“We urge you to consider the effects of your interest rate decisions on the housing market and to reverse the troubling rate hikes that have put affordable housing out of reach for too many,” the senators wrote. -Hopefully this will be taken in to account by the Fed.
This week in San Diego home prices continue to remain high as multiple offers on homes drive prices up. Lack of inventory is a very real problem here in San Diego.
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The S&P Case-Shiller Indices said San Diego held the No.2 spot for home price increases for the third month in a row, nationwide prices up 5.4 percent — its highest level in 2023.
“The main reason prices continue to rise is because inventory is so low,” wrote Lisa Sturtevant, chief economist for Bright MLS, “and there is little to suggest that the supply picture is going to change dramatically in 2024.”
Where will San Diego home prices go in 2024?
When you glance at the orange bars on the graph to the left, you’ll notice something interesting. On average, industry experts are predicting that by the end of this year, home prices will have increased by roughly 2.8%. Looking ahead to the end of 2024, they anticipate an additional increase of about 1.5%. This is particularly noteworthy because, contrary to some predictions, we didn’t see a dramatic drop in prices this year. Instead, the reality was quite different. In 2023, home prices remained stable, and a key reason for that was the imbalance between the limited number of homes available and the high demand from people eager to buy. This classic example of supply and demand has continued to apply upward pressure on home prices as we transition into the new year.
As we look ahead, the expert forecast suggests a continued rise in home prices into next year, though at a slightly more moderate pace compared to this year. It’s crucial to understand that the appreciation in home value is cumulative. Simply put, if the predictions hold true, a home that increases in value by 2.8% this year is expected to grow an additional 1.5% next year, based on the national average. This consistent upward trend in home values underscores why owning a home can be such a wise long-term investment. It’s not just about the value increase in a single year; it’s about the ongoing growth over time.
The biggest concern for home buyers is chasing the market. As mortgage rates fall homes seem more affordable, competition could drive prices higher. This could mean more home buyers cannot get into the market and continue to miss out on large equity gains and tax deductions that homeownership brings.
Home sellers are in a good position if their home is prepared to sell. Even though inventory is tight, home buyers are not willing to sacrifice on their expensive purchases. If you need help getting your home ready to sell I provide many free services to help you get ready.
Call or Text me at 760-310-0166 to discuss your options.
Tristen Campanella is a local San Diego Realtor specializing in North County San Diego. She ranks in the top realtors near you. Contact her today for a complimentary strategy session to define your goals
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