San Diego Housing Market 2022

The median price in San Diego has risen by double digits for over a year now. Home that are on the market for sale in San Diego generally are selling at a fast pace and receiving multiple offers over and above what the sellers have listed them for. The homebuyer demand is now expected to remain strong this year and through 2022 but uncertainty lies ahead with proposed interest rate hikes.

In San Diego we have been faced with extremely low inventory that goes back before COVID even hit. This combined with increased investor activity is keeping prices high. Interest rates had been the lowest on record and this created the perfect storm for a red hot San Diego housing market. The supply and Demand fundamentals will continue to fuel an expensive housing market in San Diego.

Single family homes in the Southern California region have actually declined due to lack of inventory although prices continue to rise. According to the new C.A.R. released report, sales of January 2022 single family homes have decreased 10% from last year and sales were down by over 29% from the previous month.

Now would definitely be the best time to sell a house in San Diego. Times are uncertain with the war in Ukraine and our FED set to start raising interest rates this year to combat the Biden Administrations inflationary policies. Record low interest rates fueled the 2021 hot market while most other economic sectors were suffering. Starting in Q3 2021 rates have started to climb back up, now almost 1% higher that where we were last year.

San Diego’s median home price has reached $803,000 in January 2022 which is up over 14% from last year. San Diego edged out San Francisco for the most expensive housing market. We don’t have the high wages like the Bay Area so because wages and earnings have not kept up we are anticipation a slow down soon. It’s not a good time to buy in San Diego but it is definitely time to sell if you are considering it.

There aren’t enough homes listed for sale to satisfy the current demand from buyers. Despite the COVID19 pandemic, San Diego and the entire metro area market is so hot that it hasn’t shifted to a buyer’s real estate market. In a balanced real estate market, it would take about four to five months for the supply to reach zero. In terms of months of supply, San Diego will become a buyer’s real estate market if our supply increases to more than four months of inventory. And that’s probably not going to happen. This housing market is skewed to sellers due to a persistent imbalance in supply and demand. This is also true for all of Southern California. The So. California region was singled out as having one of the the steepest declines in housing inventory over the past year. It’s a positive sign for homebuyers, especially for those to want to invest in San Diego real estate. For buyers in San Diego, the mortgage rates are still low and the positive forecast for the next twelve months nearly guarantees appreciation. This cannot last though. Realize if you buy now we could see a price decrease of more than 10% in coming years.

The San Diego housing market is cooling. Home price appreciation fell below 5%, and home prices in some areas are declining due to decreasing demand. This is an improvement over the 6 to 8% appreciation San Diego had been seeing. The expanding inventory of houses on the market makes this a great time to invest in the San Diego housing market but if you are looking for quick gains it might now be the best time to buy. If you are looking to sell your San Diego house please give us a call at (619) 431-0301 or click here to learn more.