San Diego summer trends to help you predict future market conditions.
Before making any decision—especially in real estate—knowledge is crucial. If you’re considering buying or selling in San Diego this year or next, having the right information will help you predict future market conditions and make wiser decisions. That’s why today, I will share the five most important market insights for San Diego’s summer housing market:
1. Interest rates. Rates are slightly over 7% and have been fluctuating around this mark. The Federal Reserve has hinted at potential rate reductions by the end of the year, around September. However, mortgage rates might stay higher for longer than anticipated. For buyers, it’s important to budget based on current rates, knowing that they will eventually decrease, though the timing is uncertain. Sellers should be mindful of the lower buyer demand due to high rates and price their homes strategically.
2. Housing affordability. Housing affordability remains a concern as high interest rates persist. Although we still see property value appreciation, it is slower than in previous years. This gradual increase in prices continues to erode affordability, making it challenging for buyers to enter the market.
3. Inventory levels. We began the year with very low inventory, currently around 4,000 homes on the market in San Diego. By the end of summer, this number might rise to about 6,000. There are now more homes entering the market than going into escrow, indicating a potential increase in available properties. This trend is similar to 2022, where we saw prices dip slightly from their peaks by year-end. Buyers may find more negotiation opportunities, while sellers might need to adjust prices to remain competitive.
4. Election impact. Historically, election cycles tend to reduce market activity. However, the post-COVID era presents unique challenges, and traditional patterns may not hold. Typically, fewer homes are listed, and buyer activity decreases during election periods, particularly among the baby boomer demographic, who prefer to wait for election outcomes before making decisions.
5. Housing development trends. There has been a noticeable shift in housing development. High interest rates have deterred builders from acquiring large tracts of land for extensive developments. Instead, we’re seeing more infill and urban development, such as townhomes and condos, often near mass transit, workplaces, and social amenities. This trend reflects a move towards urbanized housing rather than sprawling suburban homes.
I understand how confusing the market may be, so if you plan to sell or buy, it’s best to connect with a reliable real estate agent like myself. I study the market daily, so I can give you the latest information and figures. Just call (858) 229-6063. I look forward to helping you!
