San Diego Real Estate Market Update - Updated For November 2022!
Are you considering buying or selling San Diego real estate? If so, it's important to stay up-to-date on the current real estate market conditions. This post outlines the most recent data for all transactions, meaning both single-family homes and San Diego condos. Raw data alone is helpful, but we'll also outline what this information means for buyers and sellers so you can make the most informed decision possible.
November 2022 Real Estate Market Update
November Market Real Estate Highlights
- Pending sales are down by 44% compared to November 2021. This factor alone can significantly impact the number of homes available.
- Closed sales also reported a backlash of 43.4%.
- The median sales price rose by 4% compared to November 2021.
- Days on the market faced a rise of 45.5%.
- The affordability index continues to face the same drop by 32%.
- Homes for sale: 4,261.
Viewpoints of November 2022 Real Estate
Here, we will be comparing the stats of November 2022 with November 2021 to give buyers and sellers a better understanding of what situation the market is facing now, compared to the one faced at the same time last year.
New listings in San Diego dropped from 3,325 to 2,460, explaining the considerable decrease of 43.4% in closed sales. Additionally, the homes for sale increased from 2,977 to 4,261, by 43.1% and the monthly supply hiked from 0.9 to 1.7, i.e., by 88.9%.
Drop in Inflation
The Federal Reserve has progressed a bit to achieve its target of reducing inflation to 2%. The Consumer Price Index report, released on Thursday, November 10, 2022, has shown that year-over-year inflation has reduced to 7.7% in October from 8.2% in September.
This is how the market has reacted to this inflation:
- Preceding this reduction, the Nasdaq composite rose by 7.5% on Thursday, the biggest increase since March 24, 2020. Moreover, it has risen by another 2% on Friday.
- S&P reported a rise of 5.5% on Thursday and a 0.9% gain on Friday. It's the most since April 2022.
What to Expect From the Fed
The Fed's next meeting will be on December 14, and in that, the Fed is expected to increase the rates by half a point instead of ¾ points. Such a rise is reported after several months since the pandemic's start. In the February meeting, the rates may increase by half a point, and in the March meeting, the terminal rate hike is expected to be 100bps.
How Does This Influence Buyers & Sellers?
We have observed a huge improvement in the market, and the buyers are jumping back in quickly, increasing sales and eventually helping generate more revenue.
Today, for a 30-year fixed mortgage payment on a $900,000 home with 20% down (a $720,000 loan), the current mortgage rate is 6.625% with no points, making the monthly mortgage payment $4,610. The interest payment would have been north of 7% just a week ago. This is how considerable improvement is observed.
Want to sell or buy property but are stuck with some queries or want a free home valuation? Get in touch with us, as our experienced Beer Home Team with eXp Realty agents will surely help you. Stay tuned for next month's report!
October 2022 Real Estate Market Update
September Market Real Estate Highlights
- New listings and pending sales have both decreased, reducing the total closed sales
- Median sales price increased by 7.6% from September 2021
- Average sales price increased by 3.8% from September 2021
- Average days on market: 31, a 47.6% increase from September 2021
- Homes for sale: 4,312
October 2022 Real Estate Outlook
Buyers and sellers can examine September 2022's real estate information to inform their October real estate outlook.
New listings in San Diego County dropped from 3,565 (9/2021) to 2,717 (9/2022), explaining the 37.1% decrease in closed sales during September. However, homes for sale increased by 30.5%, from 3,305 (9/2021) to 4,312 (9/2022). As of early October 2022, San Diego has 1.7 months' inventory, an increase of 70% from last year.
San Diego home prices continue to rise, with the median sales price in September 2022 increasing by $57,750 compared to last year. Additionally, the average home price in the area is up by $36,585. Although the percentage of the original price received has decreased by 4.9%, most sellers are still receiving about the same amount for their asking price this year to date.
What Does This Mean For Buyers & Sellers?
The San Diego real estate market still favors sellers in October 2022. With 1.7 months supply (a balanced market is defined as having four to six months of inventory), sellers can set higher asking prices if they don’t chase the market and stay ahead.
Additionally, the increase in median and average sales prices in the area will bring higher earnings than this time last year. However, with a slight increase in homes listed compared to September, buyers will have more options to choose from this month.
Some sellers are using rate buy-down strategies to sell their homes, which hasn’t been seen in years. Instead of reducing the home’s price, sellers will use a 2-1 rate buy down, where in year one of the buyer’s loan, instead of paying the current rate (for example, 6.5%), the seller sets aside money into an account that pays the buyer’s mortgage at a lower rate (4.5%). A 2-1 buy down may cost the seller less than a price reduction and make the buyer happy if they can refinance into a permanently lower rate later.
Need Help in the Current Market?
If you're ready to buy or sell property, but have questions or want a free home valuation, our experienced Beer Home Team with eXp Realty agents can help. Stay tuned for next month's update!
September 2022 Real Estate Market Update
August Market Real Estate Highlights
- New listings and pending sales have both decreased, reducing the total closed sales
- Median sales price increased 7.4%
- Average sales price increased 8.4%
- Total number of homes for sale increased by 20.7%
September 2022 Real Estate Outlook
With the August 2022 real estate information available, buyers and sellers can look to that data to inform their September real estate outlook.
This August in San Diego County, the total number of new listings dropped from 3,998 (08/2021) to 3,304 (08/2022). In turn, the decreases in new listings and pending sales can help explain the 31.6% decrease in closed sales during August. Despite these decreases, the number of homes for sale in San Diego County increased from 3,649 to 4,406, a 20.7% increase. As of early September 2022, the area is at 1.6 months' inventory.
Conversely, sales prices seemed to continue upward in August: the median sales price was up by $55,000, and the average sales price was up by nearly $80,000. The percentage of original rice received decreased by 5.1%. However, the year-to-date metrics show most sellers are still receiving 103.5% more than their original asking price.
What This Means For Buyers & Sellers
The San Diego real estate market still favors sellers in September 2022. There are a few metrics to verify this claim.
First, the county is still holding 1.6 months of inventory. For reference, anywhere between four and six months of inventory indicates a balanced market. The San Diego area did see a 45% increase in inventory, but it's important to note that total inventory only increased from 1.1 months to 1.6 months. This limited supply shows that sellers are able to take more control of their asking prices, as evidenced by the YTD increase in the percentage of the original price received.
Second, the increase in median sales prices and average sales prices also favor sellers. Some owners may feel discouraged to learn that their home is worth less now than it would've been had they sold several months ago. However, the data show that selling in September would still yield higher potential earnings than a year ago.
Inflation & Increasing Interest Rates
Mortgage rates are now around 6%. This means someone buying a $900,000 home with a 20% down payment can expect mortgage payments of about $4,316.76 per month, approximately 40% more expensive than payments on the same house would've been when rates were closer to 3%.
To offset further increases in interest rates, well-prepared buyers should lock in the current rates as soon as possible. Additionally, many experts advise choosing a 7- or 10-year adjustable-rate mortgage (ARM). These variable mortgages will provide payments at the current interest rate for 7-10 years. After that term, owners can sell or refinance to take advantage of lower rates in the future.
On September 21, 2022, the Federal Reserve increased interest rates by 75 basis points. This was the fifth interest rate increase of 2022 and the third consecutive 75-point increase.
We're Here to Help in Any Market
Whether you are looking to buy or sell, if you have any questions or want a free home valuation, our experienced agents at Beer Home Team with eXp Realty are here for you. Thanks for reading, and see you in the next update!