August 2020 - San Diego Real Estate Market Update
There has been some speculation in the news over the last couple of weeks that we may see home prices dropping towards the end of this year and into 2021. While that may wind up being the case on a nationwide average, at this point in time it is unlikely that San Diego real estate prices will see declines due to our highly desirable locale and secure jobs market. It is possible that we will see our rapid gains of late begin to level-off locally, but even that would require a shift in current market trends.
The economy as a whole is still steeped in a lot of uncertainty. There are many factors at play and changes in any of them, let alone in multiple areas, could cause our housing market and the broader economy to shift.
Here are the factors to keep an eye on:
Prolonged unemployment and collateral damage to the economy due to COVID-19
Actions taken on increased and extended unemployment benefits for those who are still out of a job
Expiring forbearance agreements for homeowners affected by COVID-19 and the possibility of an uptick in foreclosure activity for homeowners unable to catch up on payments
An increase in residential new home builds which will increase available housing inventory
An increase in interest rates and fees or tightened mortgage guidelines which may push buyer demand lower
Changes in taxation, especially mortgage interest and property tax deductions which both received lower caps by the current administration
An increase in homeowners finally choosing to list their homes as hesitance related to COVID-19 begins to dwindle
Privatization of Freddie Mac and Fannie Mae and the future of the fixed-rate 30-year mortgage
The upcoming election - the candidates have different approaches to housing and regardless of the outcome of the election we will see shifts in the real estate market as a result
Currently, the real estate market is on fire - both locally and nationally - with pent-up demand from homebuyers who are taking advantage of the lowest mortgage interest rates ever. Home listing inventory remains extremely tight and most every house listed is receiving multiple offers over asking price within days, or even hours, of going on the market. Home prices have risen 9.3% year-over-year and the trend is likely continue through the Fall.
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.
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