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Boom or Gloom for San Diego Housing Market?
There is a needed shift happening in the market right now. Not a crash. We're seeing a needed relaxation of the frenzied pace of the last couple years. Asking prices are stabilizing, the number of offers is shrinking, and buyers aren't needing to submit an offer within minutes of seeing the home!
Coldwell Banker West has hosted a daily Zoom call since March 2020 where we talk about the market, what's happening, what's working. The news and Facebook pundits will keep touting the scary headlines but let me tell you, from a 20 year professional, here's what's happening right here, right now:
Sellers
We're not seeing the crazy overbidding as much. Open house traffic is robust but buyers are being more selective. More sellers are treating each offer as if it may be the only one. Many are considering accepting contingent offers where the buyer needs to sell their home first and the buyer is willing to offer more to reward a seller for waiting on a longer escrow.
Sellers looking to downsize and cash out on the tremendous equity they've earned are finding they can put down huge down payments and keep their new mortgage reasonable.
Real Examples
In my neighborhood of Normal Heights, I'm seeing price reductions and a lower number of offers.
La Mesa: A beautiful home on Dugan Street was listed at $950,000. Fully remodeled 3 bedroom 3 bath property has just 3 offers with none going over $1M.
North County: Many homes in the luxury market are starting with a high price to test the market but realizing the shift and lowering their asking prices.
Buyers
Those who were shopping at $1.5M a month ago are now looking closer to $1M because of higher interest rates. The upside is that the competition on each home isn't as fierce.
Inventory
There is an uptick in the number of homes coming on the market across the County. Finally.
Prices Dropping?
Asking prices are relaxing but appreciation is not. There is a difference. Sellers aren't pushing the top end with their initial pricing but the prices homes are closing at continue to rise. Overall appreciation will continue, but at a more normal pace. 9% to 15% annually in San Diego instead of 20% and more.
Recession Fears?
If we are headed for a recession, it's important to remember there has not been one recession in history where interest rates did not go down. So, if you get in with a rate in the 5% area, you MAY be able to refinance later.
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