Our fourth quarter San Diego market is as hot as ever, and one of the main driving factors is our low inventory, which continues to push home appreciation upward. Right now, there are fewer than 4,000 homes available on the market, meaning we have only 1.6 to 1.8 months’ worth of inventory. In other words, if no other homes were to come onto the market, all the existing homes for sale would be snatched up in just under 60 days. This scarcity has caused an 11% year-over-year increase in home prices. Even buyers we helped earlier in the year are saying to themselves, “Wow, there’s a lot more equity in my home than I thought there would be by now!”
Though ours is a seller’s market, good loans, cash purchases, and strong buyers characterize the consistent demand we’ve been seeing this year. Behind all that demand is the ever-alluring incentive of cheap money; interest rates have hit record lows on several different occasions in 2020. New construction homes, highly rehabbed or flipped homes, and heavily remodeled properties are all selling for a premium right now.
We’re seeing a shift in demand so radical and widespread that it’s transforming the normally quiet surrounding markets into hotspots. Today’s buyers are seeking big backyards, home offices, casitas, and family compounds for multigenerational living. For the last six or seven months, it seems that the traffic in San Diego is down, and that’s because countless companies have switched to remote operations, eliminating the morning commute for many workers.
No longer needing to live close to the office, many buyers are eagerly exploring areas they’d previously ruled out as impractical or downright impossible—places like Poway, Jamul, La Mesa, Fallbrook, etc. Whereas the trend up until recently has been a westward migration toward coastal Cali living, people today are turning around and moving back inland.
I’ve already mentioned them above, but those low interest rates deserve special attention; they’re truly a driving force in our market. Right now, we’re seeing borrowers lock in rates lower than 3%. (Some super-qualified buyers have even seen rates below 2%). While not everyone will be able to get a record-breaking rate, the majority of people are still able to get a fantastic one. These are likely the lowest interest rates we’ll see in our lifetime.
So, if you’re looking to capitalize on these unique conditions or have any real estate-related questions, give us a call or send an email. We know that 2021 will bring even more changes to our market, so we at the Sean Zanganeh Real Estate Team want to be there to help you plan.