Hey everyone! This month, we’re seeing a noticeable shift in the San Diego real estate market—higher inventory and softer buyer demand than we’ve seen in a long time! In this update, I’ll walk you through the latest numbers and what they mean for both buyers and sellers heading into the summer selling season.
Market at a Glance
New Listings:
In the last 30 days, 2,751 homes came on the market. That’s fairly consistent with the past couple of years. Ideally, in a healthier market, we’d want to see 3,000–4,000 new listings, but considering the current buyer activity, this slightly lower level of new inventory might actually be a good thing.
Pending Sales:
There are currently 1,630 pending sales, which is much lower than we'd like to see. A balanced market typically shows 2,400–2,500 pendings—so this gap is creating an imbalance where inventory is outpacing demand.
Closed Sales:
Over 2,000 homes closed in April, which mirrors last year’s numbers.
What the Numbers Are Telling Us
The market remains flat in terms of appreciation. About 99% of homes are selling at or near asking price, and we haven't yet seen consistent indicators of price decline.
However, some red flags are emerging:
- Closed Sales (YoY): Down 8%
- Homes for Sale (YoY): Up 42%
That kind of inventory surge suggests a possible future trend of price reductions—but only if sellers become motivated.
Will sellers soon be cutting their prices?
Despite rising inventory, we’re not seeing widespread price cuts. Why? Most homeowners:
- Have low-interest rates
- See rental demand as a viable backup
- Understand the long-term value of their property
Unless something shifts—job loss, life changes, or economic pressure—most sellers are not rushing to offload their homes and are willing to hold out for their asking price.
Foreclosure Myths Debunked
We’ve heard a lot of buyers state they are waiting on the sidelines, hoping for a wave of foreclosures. The reality? We're currently seeing some of the lowest notice-of-default numbers in years. So if you’re expecting a big drop in prices due to distressed sales, that’s likely not in the cards anytime soon.
What Could Happen Next?
We’re now entering the critical summer selling season. Historically, this is when buyer activity heats up. If we see interest rates come down and more buyers re-enter the market, we could see things pick back up.
But if this summer is quiet, and mortgage rates stay high, price adjustments may finally become more common towards the back half of the year.
Buyer & Seller Advice for May
Buyers:
Now is your time to get active. Look at properties that have been on the market for 30, 45, even 60+ days. Some sellers—due to job changes, divorce, or moving out of state—are motivated and open to price cuts. Make offers on those for a price that makes sense to you.
Also consider asking for the seller to buy down your interest rate. A great strategy we use right now is called a 2-1 Buyer Down. This is where the seller would buyer down your first year's mortgage rate by 2%, and your second year by 1%. (Example: Year 1 - 4% APR, Year 2 - 5% APR, Years 3 Refinance to current rates)
Sellers:
You need to bring your A-game. That means:
- Pricing your home right
- Preparing and staging it well
- Standing out from the competition by being the clear next to sell home.
Put yourself in the buyer’s shoes. Ask yourself: Would I choose this home over the others available?
If you have any questions or want to discuss the market, reach out directly or connect with someone from the True Local team. We’re here to help you make sense of this ever-changing market.
Until next month—take care!