Hey guys! I know a lot of people are sitting back and wondering if now is the right time to buy a home. Given the current market conditions, this hesitation is totally reasonable, but before you make that decision we want to give you all the facts! Here are a few things you should know:
Prices have come down
Since the peak in May, we’ve seen month over month decline in prices across the county. Some areas are holding their values better than others, however the county numbers are showing a 11% decline. Most analysts still predict that our year over year values will be up, however only by 1-3%. That would mean our current values (November 2022) are about where most analysts predict they will stay. I personally think we could see some areas that were overinflated see slightly higher decreases in values, but nothing declining more than 15-20%.
When do analysts predict values will increase
My favorite analysts to follow are Realtor.com, BlackNight, and San Diego native Alan Nevin. The average prediction across the analysts is that we will see a 2-5% increase in values in 2023, with much larger increases in 2024. Most analysts say that interest rates should hold steady during the 1st quarter of 2023, and start coming down in Q2. Once that happens we should see a spark in the Real Estate market.
So why is the next 3-6 months shaping up to be a good time to buy?
More negotiating power
Buyers now have an opportunity to negotiate favorable terms when buying a home which is something that was unheard of the past couple of years. In the current market, sellers are more willing to cover closing costs, agree to a 2-1 rate buy-down, and make the transaction more appealing to buyers. The days of feeling like you may need to waive contingencies or pay drastically over asking price to get your offer considered may be coming to a close.
San Diego is a highly desired place to live
According to Redfin, San Diego was the 4th most popular destination for Redfin.com users looking to relocate. On the other hand, Los Angeles and San Francisco were the top cities that most homebuyers were leaving. This should give you some level of confidence that demand will remain relatively high in San Diego as the market is continuing to grow.
Low Supply
I know I sound like a broken record, but prices are determined by supply and demand. The bottom line is… San Diego is WAY behind with supply. That is why our prices are so high. We have extremely tight regulations on builders, the cost of building is so expensive, and we are limited in the amount of land we have because of our surrounding neighbors. Therefore, I don’t see how we will ever catch up to supply enough homes for the demand we have.
Bottom line
While it may seem like a scary time to buy, if you are buying for the long run and VALUE is important, the next 6 months could be your window. And in regards to interest rates don’t forget, you can always refinance once rates go back down.
If you would like a FREE strategy call with me, please reach out. I love helping people through these tough decisions.
- If you are thinking about buying or selling we would love to help!
- Visit us at TrueLocalRealty.com
- Or give us a call at 888-503-3117
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