Navigating the Shifting Real Estate Landscape: A Mid-Year Update

Real Estate July 27, 2023
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Hey guys! Time flies, and Q2 is already over! It’s time for our mid-year real estate update where we dive into the latest stats and trends that are shaping the current market.

Statistics

To start, let’s address the elephant in the room. The amount of homes being sold is significantly down. In fact, June witnessed a 10% dip in total sales compared to May, and a jaw-dropping 27% decline compared to the same time last year. However that stat is deceiving, because it’s not due to lack of buyer demand, it’s due to lack of inventory. We continue to see multiple offer situations and raising prices in most communities.
Across the nation, housing affordability has taken a hit in Q2 for various reasons. The renewed surge in home prices has pushed the percentage of average wages needed to cover homeownership expenses up to 33%. That’s a tough pill to swallow for aspiring homeowners trying to make their dreams a reality.

Mortgage Rates

As for mortgage rates – they have jumped up to over 7% and have shown quite a bit of fluctuations over the past few months. While they increased slightly throughout the second quarter, they experienced a sharp surge in July amidst speculations of a potential interest rate hike by the Federal Reserve. However, we will want to keep a close eye on inflation. If it starts to simmer down, it might give the Fed some breathing room, potentially leading to more favorable mortgage rates.

Bottom Line

To sum everything up, we are in some uncharted territory right now. We have extremely low inventory and healthy demand for housing, however interest rates are holding back the market. Some analysts predict once interest rates come down we will see a flood of buyer activity, and I would have to agree. With a lot of homeowners not wanting to sell because they are locked into a 3% mortgage rate… I could see these low inventory levels staying put for quite some time.  

Remember, real estate is a long-term investment, and taking the time to assess market conditions and understand the nuances will empower you on your journey. Stay tuned for further updates as we navigate through this intriguing period of change in the real estate market.

Stay tuned for more updates, tips, and tales from the world of San Diego real estate. Until next time, folks!

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