The value of homes in the San Diego-Carlsbad metropolitan area has seen a 6% surge over the past year. This could lead to a decrease in home sales, with predictions of a 7-15% dip in the coming year. As of this week, the apartment vacancy rate in San Diego County was 3.4%, compared to 2.3% at the same time last year, according to real estate tracker CoStar. This implies that while house prices will still rise, it won't be as drastic as the past two years.
This means that the San Diego housing market will have to adjust to a new set of rules for the next two years, particularly in markets that are already expensive, such as San Diego, which have experienced significant home value appreciation. Redfin's comprehensive analysis for the upcoming year suggests that the West Coast markets and metropolitan areas, which experienced the highest gains during the pandemic, will be the ones that slow down the most. An increase in inventory and other factors could lead to a recession in the San Diego housing market. The National Association of Realtors (NAR) reported that home prices have appreciated by 18.5% in the past year and an astonishing 46% in the past three years.
However, overall home prices are expected to trend downwards due to higher interest rates and potential job losses. A declining population, partly caused by a weak labor market, will reduce competition in the market and further support price drops. We can help you review homes you're interested in, suggest how to manage mortgage financing, and provide other guidance. This implies that people will always want to move and stay here, reducing the risk of a rapidly declining housing market in San Diego.
Last month, Case-Shiller reported that prices were down 2.5% in San Diego compared to the previous month. The conditions of recent years, when interest rates were low and house prices were steadily increasing, no longer exist. Real estate professionals have argued that the residential price increases we've seen recently are not sustainable.