Will home prices continue to rise in San Diego? This is an important question to consider when deciding to purchase now versus waiting for prices to decrease or stabilize. According to CoreLogic, home prices will increase on a year-over-year basis by 5.6% from April 2022 to April 2023. To put this in perspective, an $800,000 home would increase by almost $48,000 in a year.
Will this continue? No one has a crystal ball but there are a few things to consider:
- According to SDAR, in February 2021 San Diego home inventory decreased 60.0 percent for Detached homes and 52.1 percent for Attached homes.
- The U.S. Department of Commerce's Bureau of Economic Analysis revealed that San Diegans' real personal income increased by 2.8 percent annually in 2019.
- On February 24, 2021, the average 30-year mortgage came in at 3.38% (the second-lowest 30-year rate in history). See more historical data at themortgagereports.com.
These three key factors provide buyers with valuable data to make an informed decision. Research is vital because buyers do not have the privilege of going back in time to take advantage of low rates and possibly lower prices. There will always be unknowns when it comes to purchasing a home.
Questions to consider before making a decision:
- Will San Diegans' real personal income decrease?
- Will the number of cash buyers in San Diego decrease?
- Will the interest rates rise enough to allow for increased inventory?
- Will San Diego become a less attractive place to live for people with the means to live here?
- Will millennials continue to make up the largest share of buyers?
If buyers wait to purchase a home, they risk paying more down the road. On the other hand, if buyers purchase now, they risk overpaying in an unpredictable market. I cannot stress enough how important it is for homebuyers to do their research. This may sound cliché, but the world is made up of research. You may be asking yourself, isn't my realtor supposed to research for me? The answer to this question is yes. Alexander Pfleger works full-time as a real estate broker to assist his clients in making the best decision possible, however, there is immense power in making an informed decision based on your own research. This could include historical data, surveys, economic forecasts, and so on. Whether buyers choose to wait or purchase now, thorough tangible research will give them confidence in their final decision.
Review the below charts to begin the process: