San Diego Real Estate Update – May 2024

I’m diving deep into this month’s Real Estate update, and boy, is there a lot to unpack with all the buzz surrounding San Diego’s status as the fastest appreciating market. So, buckle up as we break it all down.

What are all these headlines about?

Let’s kick things off by addressing the headlines. From March onwards, you’ve likely been inundated with news about San Diego claiming the top spot as the fastest appreciating market. What’s driving this surge? Well, it’s a familiar tale—demand versus inventory. San Diego has always been a hot spot, attracting residents from all corners. However, here’s the twist: our inventory levels have been seriously lacking. We’re talking some of the lowest levels on record, especially towards the end of last year. Picture this: November, December, and early January hit an all-time low for new listings entering the market. Ideally, we’d like to see new inventory levels around the 4,000 to 5,000 mark, but we’ve barely been scratching the surface, barely reaching the 2,000 new listings range. It’s simply not enough to keep pace with demand.

But fear not, there’s a glimmer of hope on the horizon. Over the past few months, we’ve witnessed a steady increase in inventory. That’s right—more homes are hitting the market. In the past 30 days, we’ve observed a fairly balanced dance between new listings and homes sold. Sure, the pace of demand might be easing up a bit, thanks to those interest rates inching upwards. But hey, that’s not necessarily a bad thing.

Looking ahead

Now, let’s turn our attention to the future. Keep your eyes peeled on what the Federal Reserve is cooking up. They have the power to make or break our market with those interest rates. Rumor has it, we might see some rate cuts down the line this year, but for now, it’s a waiting game. The one good thing coming out of the last FED meeting is that instead of allowing $60 billion in Treasuries to roll off each month, it will allow just $25 billion. Leaving more money available for mortgage-backed bonds. This should give us a slight bump to help interest rates get below 7% again. 

Buyer and Seller Advice

Buyers, it’s crucial to bring your A-game when pursuing a property, especially in a competitive market like this. If you find yourself up against other buyers, don’t hold back. Offer attractive terms like a quick close or a short contingency timeframe for inspections and financing. Being assertive is key in such situations. However, if you’re not facing competition, seize the opportunity to negotiate your butt off. Don’t hesitate to put an offer on the table and see where the seller stands. It’s all about finding that sweet spot where both parties are satisfied, so don’t be afraid to explore your options and negotiate to get the best deal possible.

Sellers, let’s focus on the two major factors that can make or break your sale: condition and price. When it comes to condition, buyers are on the lookout for move-in ready homes. Now, that doesn’t necessarily mean your place needs a full-blown renovation. What buyers want to avoid is the hassle of having to tackle major repairs or upgrades right off the bat. Think of it as setting the stage for your buyer to easily transition into their new home with minimal immediate expenses.

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