April 2022 - San Diego Real Estate Market Update

Apr 19

The real estate market is still incredibly hot - we're still seeing gains in home prices month-over-month and nearly every property listed receives multiple offers and sells for way over asking price. Inventory is still extremely low as homeowners choose to stay in their homes as the prospect of purchasing a new home in this market seems disadvantageous - especially since most homeowners who carry a mortgage refinanced while rates were at all time lows below 3-3.5%.

Inflation is at a 40-year high and the Fed is taking an aggressive stance, rising interest rates to counteract consumer spending. Mortgage rates are now hovering at 4.5-5% and anticipated to rise even further. This is causing some homebuyers who have been attempting to secure homes but have not yet succeeded to reevaluate their plans. However, even with the impact interest rates are having on buyers, we have not seen a substantial decrease in homebuyer demand. It seems homebuyer demand is here to stay, so the only foreseeable prospect for home prices to level off is a steep increase in supply - something we have not seen any signs of, yet.

Future signs of potential market changes we're watching for:

Mortgage rates continuing to climb and traditional and investment buyers alike beginning to withdrawal from the market
Larger numbers of empty-nesters downsizing and as they do so, freeing up inventory of single family homes
Inflation increasing such that home price appreciation no longer outpaces it
Fed Policy working to eliminate inflation, the Country resuming it’s deflationary trajectory and wages and asset prices taking a tumble
A US recession hitting and the Fed beginning to stimulate the economy, stimulus payments resuming and interest rates falling
Disincentivizing policy arising to slow down investors in an attempt to make housing inventory available to traditional buyers, as inventory rises, prices fall.
Unexpected changes to demographics - millennials not beginning to buy homes in their early 30’s as anticipated, Gen Z disrupting the market with their sharing economy concepts, etc…

As for buyers waiting for lower prices and sellers attempting to sell at the tip-top of the market - Remember, it is impossible to time the market perfectly in your favor. It happens - but it's a matter of luck, not skill.

As always, we will be here to continue to provide you with updates about the housing market and answer any and all of your questions. Feel free to reach out to us anytime.