San Diego seeing the 3rd highest price increase this year!
San Diego Union Tribune and The New York Times posted articles showing that San Diego has seen the 3rd highest price increase this year compared to all other major cities in the Nation! A whopping 9.5% YoY. That is huge because we are the only California city on the list. Why is this? Well… we have huge demand from local buyers trying to take advantage of interest rates, but the bigger kicker that we see is actually the amount of folks from other markets who are wanting to move to San Diego. We’ve seen a large amount of people moving to sunny San Diego from The Bay Area & LA, two historically more expensive markets so San Diego looks like a bargain to them (LOL). We expect this trend to continue since a lot of individuals will be able to work from home in the future, and we all know… there’s no better place to live than San Diego!
Inventory Levels hit -40.6% YoY!
Yes you heard us correctly! -40.6% less inventory in October compared to this time last year. Even worse… in November we had only 1,164 listings come on the market which is historically low for any month. Furthermore we had 2900+ homes go under contract, and 3500+ homes Close Escrow! This all adds up to us going into December with some of the lowest inventory levels we have ever seen!
What does this all mean for December and beyond?
With inventory levels this low and demand remaining high, we don’t see how this upward trend on pricing could slow down anytime soon. 2 things would need to happen to slow this trend down… first we would need a significant inventory increase, and secondly we would need interest rates to increase. In order for us to get back to normal inventory levels we will need to see 4x the normal monthly new listings for 3 consecutive months. As for interest rates the FED has come out and said they don’t plan to increase interest rates in the near future, which to us means probably not until the 2nd quarter of 2021. Therefor we predict this price increase will continue until at least April or June 2021.
As always, we hope you find this information useful. If you ever have any questions about buying or selling in San Diego County, please give us a call! 888-503-3117