Hey guys! Can you believe it’s already the Holiday season? Time’s flying! It’s that time again for our Quarter 4 real estate update, where we dig into the nitty-gritty of the latest stats and trends shaping up the current market. Let’s dive in together!
Home Prices and Affordability:
Towards the end of last month, home prices continued their upward trend, marking a solid 10.2% increase compared to the previous year. The median sales price reached an impressive $915,000, and homes are now spending an average of 28 days on the market. However, in October, home sales took a bit of a hit, with only 687 properties changing hands. Despite fewer transactions, the limited number of available homes is keeping values high.
A Peek into Inventory Trends:
On the inventory side, there’s good news with a 32% increase in homes for sale compared to last year. If we look at the numbers, we are starting to see a gap between new listings and homes actually being sold. In October, out of a total of 6,681 homes available, only 1,819 were sold, showing more homes on the market than people buying them. Some may say this is the turning point for the market however, this is something we’ve been wanting to see. If we can get to 4 months of inventory (still a long way to go) it would mean we are in a balanced market. Not a market that is appreciating too fast. To significantly influence the market in a negative way, we would need to see a lasting decrease in consumer demand, paired with consecutive months of heightened new inventory.
Interest Rates:
Now, let’s dive into the pressing question on everyone’s minds: When will interest rates begin their descent? Currently hovering around 7.5%, we find ourselves in a slightly better position than the peak of 8% observed just last month. Reassuringly, the Federal Reserve signaled that there won’t be any further tightening of rates, instilling a sense of stability that’s expected to endure until at least mid-2024. Analysts are optimistic, foreseeing a positive shift with the potential for rates to dip around the turn of the year, possibly in January or February. My expectation aligns with a gradual decline, bringing rates just below the 7% mark early next year, and maintaining this trajectory throughout the first quarter.
San Diego’s Magnetism:
Closing out the Fourth Quarter, we recognize the market’s nuanced fluctuations, yet one constant prevails—the enduring magnetism of San Diego. Amidst murmurs of a California exodus, our city stood resilient, drawing in four times as many newcomers as bidding farewell. Specifically, residents from the Bay Area and Los Angeles spearheaded this migration, solidifying San Diego’s allure as unparalleled. For these reasons, we can be confident that San Diego’s real estate market will stay robust, keeping its value intact.
Your trust means the world to us, and we’re here to navigate these real estate waters with you. Should you have any questions or simply want to chat about all things San Diego, don’t hesitate to reach out.
Here’s to making the most of the remaining days of 2023!
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