The real estate market is currently navigating a complex landscape of global conflict, high interest rates, and shifting consumer confidence. Despite these challenges, San Diego continues to show signs of a healthy, evolving market.
By the Numbers: San Diego County Overview Over the past 30 days, we have seen a leveling effect in inventory as new listings and closed sales balanced out.
New Listings: 1,836 homes came on the market.
Closed Sales: 1,709 homes successfully closed.
Pending Sales: 1,388 properties went under contract.
Median Sales Price: Increased approximately 1.3% year-over-year.
Inventory Levels: Total inventory is down about 12.4% year-over-year.
*The stats are showing us a healthy balanced market, that is moving slow*
A Tale of Two Markets: Wealthy vs. Entry-Level Markets... current market conditions are impacting different demographics in distinct ways. The Coastal Surge Wealthier buyers remain active in premium coastal neighborhoods. While San Diego City has seen a 3% decrease in values, areas like Del Mar, Encinitas, Coastal Oceanside, and Carmel Valley are experiencing significant appreciation. However we are seeing challenges in the Entry-Level Markets / More Affordable areas such as Escondido, Chula Vista, San Marcos, and Vista, those areas are seeing stagnant growth and even slight depreciation.
With interest rates at 6.5%, many first-time buyers find that monthly mortgage payments for loans between $500,000 and $800,000 far exceed the cost of local rent. Interest Rates and the Federal Reserve The Federal Reserve, under new chairman Kevin Warsh, is currently holding rates steady due to the inflationary environment. While a rate cut may be possible before the end of the year, short-term relief is more likely to come from an improving bond market as global tensions, such as the Iran conflict, hopefully stabilize.
Opportunities for Creative Buyers It is not all "doom and gloom" for those looking to enter the market. Savvy buyers are using creative financing to combat high rates: 2-1 Interest Rate Buy Downs: This allows buyers to lower their rate by 2% in the first year and 1% in the second year.
Seller Concessions: Buyers can negotiate with sellers to fund these buy downs, with the intention of refinancing in a few years.
Builder Incentives: Some new construction projects are offering 3-2-1 buy down programs.
Advice for Sellers Patience is key in this market. While there may be fewer buyers, homes will sell if they are priced correctly and show well against the competition. If you have questions about your specific neighborhood or are ready to explore your buying options, reach out to the True Local team today.