San Diego Real Estate Video Blog with Curtis Chism

What’s Going on in the San Diego Housing Market?

Mon, 14 Mar 2022 08:00:00 +0000

Let’s get into the data for our local San Diego housing market.

The market shot up again here in San Diego. Let’s find out why. Hey everyone, Curtis Chism with the Chism Realty Group, third-generation San Diegan and local real estate agent, helping people buy and sell real estate here in sunny San Diego. If I can help you buy or sell, please reach out. Let’s have a conversation about how I can help you. And let’s get right into the market data about what is going on in the San Diego real estate market.

We are up another 3.4% as of February 2022. That’s on top of 4% gains in January of 2022. So in January, we went from $850,000 to $855,000. We’re now up to $915,000 as the median price for home sales here in San Diego. That is after home sales remained essential flat from July. The median price was ranging from $850,000 to $860,000, and now it’s starting a rapid rise.

What we’re seeing is the sales to list price is rising rapidly. 105.3% is the average final sales price to list price. That is the highest that it’s been essentially ever here in San Diego. The bidding wars are definitely getting out of control, and it’s getting very frothy for sure.

So what is going on? This is actually in the midst of rising interest rates. We’ve been essentially at a 4% interest. Everyone is thinking that the market is going to cool off because of that. Is it going to crash? Well, right now, it’s getting stronger, and I think a lot of the reason why is because buyers are trying to get in before interest rates go up even more. Obviously, we have rising inflation, so there’s huge concern about interest rates continuing to rise to counteract that.

There’s also the war in Ukraine. There have been a lot of questions that I’ve been getting around that. How is it going to impact the real estate market? I wish I really knew how it was going to impact it. The longer it drags on and the bigger it gets, it will definitely have an impact. If it’s short-lived, then perhaps it won’t have a major impact. Right now, we’re not seeing any impact at all—no cancellations that I’ve seen because of that, but you never know.

So, very strong market here in San Diego, and that’s for both single-family homes and for condos. Right now, we’re at very very low inventories, at just over 1,700 homes available. We are up 5% over January when we had just over 1,600 homes available. So inventory is coming up a little bit but essentially holding flat.

What’s going on? Where are the buyers coming from? Why are prices going high? A report came out recently that San Diego is the least affordable city in America, more expensive than San Franciso or Los Angeles. While that’s a great clickbait headline, and while that might be true based on income levels to what the house costs here and overall cost of living, it’s actually still significantly cheaper than Los Angeles or the Bay Area. So Los Angeles’ median price is right around $1.2 to $1.3 million, and the Bay Area is $1.5 to $1.6 million.

“The bidding wars are definitely getting out of control.”

So San Diego is considered affordable from a home sale perspective as compared to these other cities. So we’re seeing a lot of people moving to San Diego with large down payments from the homes they’re selling up there to be able to put in the homes down here because they can work remotely, but a lot of tech is moving here. So that’s where we’re seeing a lot of the money is coming from, and a lot of these home sales are being driven from.

That being said, the people I’m working with are certainly both relocation and a lot of people here in San Diego, looking to either buy their first home, upgrade their home, or just cash out and move out of state. So there are still a lot of different types of buyers in the market. There’s not one single market driver here at all, a lot of different factors.

So that’s what’s happening in the market. If I can help you either buy or sell or if you’re looking to know what your home might be worth, I’m happy to have a conversation with you and see what your home might sell for in today’s market. And really, it’s about taking a look at where is the housing market going and what will your house sell for once we get it on the market.

So what it might sell for today might be different than what it might sell for in a couple of months, so let’s have a conversation about how we can help you sell your home. Looking forward to talking to you on the next one.

How To Gain True Leverage When Buying A Home

Mon, 24 Jan 2022 00:00:00 +0000

Here’s why you should always have your own agent when buying a home.

Are you considering working with the listing agent to buy a home because you think you’ll get an advantage in the transaction? There are two main reasons why you should never do that:

1. Responsibility to the seller. The listing agent has a fiduciary responsibility to the seller, meaning their No. 1 priority will be getting them the highest price and best terms in the transaction. Even though they’ll be working with you too, the seller will be their main concern.

2. A strong relationship with the seller. Most likely, they have a very strong relationship with the seller already, and you have no idea how long they’ve been working together. You can’t come in at the end and overcome that relationship to get a better deal.

The best thing you can do is seek out your own expert representation; you deserve someone working for your best interests. You want to work with a real estate agent who has had plenty of success in the marketplace, knows how to get offers accepted, and can help you get a fair price and the best terms. That ensures you’re as protected as possible throughout the entire transaction.

“The best thing you can do is seek out your own expert representation.”

In our current market, a buyer must submit an average of 18 offers to secure a home. However, our team has a proven track record of usually getting your first or second offer accepted.

If you’d like to buy or sell a home, please reach out to us via phone, text, or email. We’d love to have a conversation with you.

Our Market Is Starting The Year Hot

Fri, 14 Jan 2022 00:00:00 +0000

Let’s go over all the most recent stats for our housing market.

Where are home prices headed in 2022? Today we’re going to look at the January 20222 housing market using our data from December. The number one thing on peoples’ minds is rising interest rates. Rates have increased from about 3.1% to 3.64%. These increases put a lot of pressure on people to buy a home quickly and lock in these rates.

We don’t know where interest rates are going exactly, but inflation is at an all-time high, so they will likely rise. I think we might hit 4% soon, but some experts say we will hit 4% and drop back down.

Inventory is so extremely low. We have only 1,385 homes available; that’s less than 1,000 single-family homes and 400 attached homes. A year ago, we were hovering around 3,000 homes, which was considered low still.

I anticipate that inventory will increase in the next couple of months as we enter Q2 and buyers enter the market in full force. However, there are still plenty of buyers in our current market. There’s not a lot available, but when a great, well-marketed home becomes available, it flies.

However, other homes are not marketed well at all, and they are driving up the days on market. We’re seeing an average of 22 days on market, which is up one day from last month. You can see this slow uptick over the past few months, but again, hot homes are still moving fast.

The sale-to-list price ratio is around 102%, meaning that homes sell for above list price on average, but again, that depends. Properties that have been on the market longer will sell under list price.

“When a great, well-marketed home becomes available, it flies. ”

If we didn’t put any additional homes on the market, we would sell our remaining inventory in half of a month. For townhomes, we’re at 0.3 months of inventory.

If you’re thinking about selling, this is a great time to do so. We can prepare your home, market it, and make sure it sells for top dollar. If you’re thinking about buying, there’s not a lot to choose from, but you do have a chance to lock in these low interest rates.

If I can help you buy or sell a home or just answer any questions you have, please reach out via phone, text, or email. I’d love to hear from you.

Where Are People Getting the Cash to Buy Homes?

Tue, 28 Dec 2021 00:00:00 +0000

Here’s how so many people are buying homes with cash lately.

How are all these people buying homes with cash? Where is all the money coming from to buy homes with cash or make massive down payments? I get asked these questions quite a bit, so I’m answering them for everyone here today.

Here’s just one example: Let’s say someone bought a home in the down market of 2014 and paid about $400,000. Fast forward to today, and they can sell that same home for around $750,000 due to home appreciation. They now have an extra $350,000 of equity plus whatever their original down payment was that they can put toward a new home. Just the $350,000 is 20% of $1.75 million, so they can put a 20% down payment on a house that costs that much.

“With these interest rates, you may have the same monthly payment on a larger home as you did on a smaller one.”

These types of situations are giving buyers substantially more purchasing power to buy their next homes, which is part of why we’re seeing so much appreciation. Of course, you have to be able to afford that higher mortgage payment, so a lender will look at your debt-to-income ratio. So maybe the buyers in the example above won’t buy an almost $2 million home, but a $1 million home would certainly be within reach. With the way interest rates are these days compared to where they were, you may even have the same monthly payment on a larger home as you did on a smaller one.

An alternative is the programs out there that can turn you into a cash buyer. Even though you’re getting a loan, by paying a small fee you can be a cash buyer, which allows you to compete and possibly outbid conventional buyers with a cash offer, which will be converted into a conventional loan later. That’s another way so many people are buying homes with cash in this market.

If you need a great lender, I’d be glad to make an introduction; they’ll help guide you through the process. If you have any questions or are looking to buy or sell, please hit me up via phone, text, or email, and let’s have a conversation. I look forward to speaking with you soon.

What Do the Changing Loan Limits Mean?

Thu, 16 Dec 2021 00:00:00 +0000

Here’s a look at what’s been going on in the market and what’s to come.

The high-balance loan limit just increased to almost $880,000 in San Diego County—what does that mean for the housing market as we head into 2022? Today I’ll share the latest stats from our market and give you some insight into what we can expect from the coming year.

The median home price for detached homes has held steady at around $860,000 for the last few months. The attached home market—condos and townhomes—increased last month by $30,000. That’s over a 5% gain!

So why is this all happening? Well, the data shows what’s going on very clearly. Single-family homes are becoming less and less affordable, so the prices remain relatively flat. The percentage of the original list price to the actual sales prices has essentially remained flat as well.

Also, the days on market are starting to climb; they’re up to 24 days for single-family homes, which is up from 22 days last month and up from 18 back in July. It’s taking almost a week longer to sell a single-family home now than it did about six months ago.

“Competition for both buyers and sellers will be higher in the spring.”

Those who are being priced out of the single-family market are being driven into the condo and townhome market. That’s pushed the days on market for detached homes down, and sales prices are increasing as well. Part of that is due to the rapid appreciation that occurred last month.

As I mentioned before, the loan limits are being raised significantly for conventional loans; you can go up to $879,000. That will increase affordability in the detached home market. In early 2022, we can expect many people to enter the housing market again since many people have been waiting to buy and list until spring. The spring season will likely bring a lot of activity to the market, meaning that competition for both buyers and sellers will be higher then.

If you have any questions or need assistance with buying or selling a home, don’t hesitate to give us a call. Let’s talk about your different options.

Zillow Quits? Is a Home Crash Coming?

Thu, 11 Nov 2021 00:00:00 +0000

Here’s why Zillow had to cancel their iBuyer program recently.

Zillow just ended its iBuyer program; what does that mean for house prices here in San Diego? The whole premise of how Zillow bought houses was based on their Zestimate, an algorithm that calculates the price of your home. They believed in the algorithm, and they went all-in on it, buying homes that it said were a good value.

Over this last year, they’ve lost half a billion dollars through this program by overpaying for houses. As real estate agents, we always knew that the Zestimate was off. Sometimes it was spot on, but other times, it was off by 3% to 7%. This highlights how important it is to have a Realtor price your home correctly by taking a look at your house and diving into the details. This goes for other algorithms as well.

What’s going to happen to real estate prices now that Zillow has backed out? Frankly, I don’t think Zillow had that big of a market share, so it shouldn’t have that big of an impact on the market overall. The bigger issue is that there have been a lot of institutional buyers, like Zillow, who have driven up the price. As the market starts to level out, their margins are shrinking, and more of them might back out because of this.

“Agents always knew that the Zestimates were off the mark.”

Zillow had been offering higher prices, which made it hard for the contractor or school teacher down the street to compete for homes, so there’s one less institutional buyer to worry about there. However, there are more, like BlackRock, who are still buying homes. Even with this, I expect prices to level out until the end of fall.

Let’s take a look at what’s driving these high prices. The first factor is the super-low mortgage rates, which allow people to afford much more expensive houses. On top of that, loan limits just went up. The second factor is that we have a housing shortage of 5.5 million homes. It will be very difficult to build our way out of that with all the restrictions in California. The final factor is inflation. We’ve seen it before, and we’re seeing it in real estate.

Where do you want to have your money when inflation hits? Gold is fine, but it doesn’t give you any returns. Real estate is the best hedge against inflation because it locks in your mortgage rate, you get appreciation, you can buy down equity as an investor, claim depreciation, and get tax write-offs.

If I can help you buy or sell a home, please call, text, or email me, and we can have that conversation. I’d love the opportunity to show you what your home may be worth.

What Do Our Market Conditions Mean for Buyers & Sellers?

Thu, 21 Oct 2021 00:00:00 +0000

What do rising rates and low inventory mean for you?

Inventory is typically a big driver of home prices. The supply of homes decreased by 50% year over year, and home prices have increased by 16% in that span. If you’re looking to sell a home right now, that means you’ll have very little competition. As inventory begins to rise, that competition will increase, and prices will dampen.

In June and July, the median home price for single-family homes dropped to $855,000 and then to $850,000 in August. In September, it jumped up to $860,000. Part of the reason for this was a lack of home sales above the $2 million price point, which drove down the median price. Now, things have picked up again in the luxury market, which is driving the median price up back up.

The list-to-sales price ratio is around 101%; for a while, it was between 103% and 104%. That’s why we saw a rapid appreciation of prices, which is now starting to calm down. We’re starting to see better prices and fewer competing offers on homes. That said, if a property is well-maintained and in a desirable location, it will receive multiple offers, and it will likely sell for over asking price. If the house has some issues and isn’t in as desirable an area, then it will probably sit on the market for longer and might undergo a price reduction.

“There might be a smaller pool of buyers in the winter, but the buyers that are in the market tend to be more serious.”

Currently, our days on market is 21 days. That’s been ticking up very slowly from the 18 days it was before. What does that mean for you? Well, if you’re selling, it means you should consider what it will take to prep your home for sale, be that deferred maintenance, landscaping, or boosting your curb appeal. A fresh coat of paint always goes a long way to cleaning up a house, and if you’re planning to spend more money, spend it on the kitchen—that’s where you’re going to get the biggest bang for your buck.

If you’re thinking about buying, the market is slowing down a little, meaning you won’t have to compete against as many offers, though there might still be some competition depending on where you’re looking to buy. Additionally, interest rates are likely going to start rising. Mortgage rates have been historically low for a long time, but the Fed has announced that they’re going to taper their bond-buying program, which has generated concerns about inflation. Right now, rates are hovering around 3%, so now is a good time to lock in a low rate before they go up again.

Another consideration is that we’re heading toward the holidays. Historically, home sales slow down around the holidays, which is probably one reason why we’re seeing lower inventory right now. That said, inventory is so low that prices should keep prices up through the wintertime, which is when you’d normally expect lower prices. However, there are also fewer buyers in the market; many decided to wait until after the New Year to take up their home searches. For sellers, there might be a smaller pool of buyers, but the buyers in the market tend to be more serious around this time of year.

If you have any questions about buying or selling a home, or you need any assistance with your real estate goals, don’t hesitate to give me a call or send an email. I’d love to hear from you.

How Will Home Values Be Affected?

Tue, 05 Oct 2021 00:00:00 +0000

How the eviction and foreclosure moratorium’s end will affect home values.

How will the ending of the eviction and foreclosure moratoriums impact home values? Read on to find out. Since the start of COVID in March of 2020, it’s been impossible to evict a tenant for non-payment of rent unless they’re doing something illegal there. That policy ended on September 30. There certainly are landlords who are ready to get rid of their properties and stop being a landlord or move to other states where they’re more landlord-friendly. When that happens, we’ll see some additional homes come on the market from that source.

“There will be some additional homes hitting the market but probably not a flood of homes.”

For the past year and a half, banks also haven’t been allowed to issue foreclosures if people weren’t making payments. That policy has also ended. The good news is that home values have risen about 30% since the start of COVID. If you’ll likely face foreclosure, please contact me, and let’s have a conversation about selling your home, so you can put money in your pocket instead of getting foreclosed.

There probably will be some folks that do get foreclosed on, but it won’t be a huge percentage. There will be some additional homes hitting the market, but probably not a flood of homes. This will slow down how fast home prices have been appreciating. Couple that with rising interest rates and the Fed slowing the bond-buying program, and appreciation will slow down. We’re probably going to see appreciation growth around 0.5% per month, which is much more sustainable.

If you’re looking to buy, it’s still a great time to get in because home prices are likely still going to climb. If you’re a landlord who’s ready to sell your investment property, I can help with removing tenants and selling the property. If you’re in a forbearance situation, let’s have that conversation so I can help you sell your home. If you have any questions, don’t hesitate to reach out to me. I look forward to hearing from you.

Is the Housing Market Resetting This Fall?

Tue, 14 Sep 2021 00:00:00 +0000

Here’s a mid-September market update using August’s numbers.

Is the housing market cooling? In short, yeah, it is cooling off a bit. We’ve been seeing this change since April, but it’s finally starting to reflect in the numbers, so let’s take a look at them:

The median price for a single-family home held steady at $875,000 for two months but fell to $850,000 last month. For condos, the median price rose from $555,000 to $560,000.
The sales-to-list price fell from 104% to 102% last month for single-family homes. For condos, it fell from 103% to 102%. This number is how much, on average, people paid over the list price.
We went from 0.9 months of supply to 0.8 months in August. This number is how long it would take us to sell out of homes if no new ones entered the market.
Interest rates are still low. The Fed was supposed to tapper off the bond-buying program, but that doesn’t seem to be happening quite yet.
The average days on market increased from 18 days to 20 days. This number is just how many days the average home takes to sell.

“Going forward, I expect the market will be a little more stable.”

Are prices going to fall? They did fall for one month, but it’s unlikely that they’ll keep falling because this is more like a balancing of the market. The real estate market tends to slow down in August, but once Labor Day hit, it started to pick back up. It’ll be interesting to see the data for September and October.

The market is still super competitive; homes are still selling over list price with multiple offers. I think agents and sellers realized they can’t keep pushing these crazy prices and are scaling back just a little bit. Going forward, I expect the market will be a little more stable. If a home has some issues, it might sit on the market a little longer.

If you have further questions about how our market is doing or anything else related to real estate, you can call, text, or email me. I’d love to help you out however I can.

Will Our Kids Be Able To Own a Home In The Future?

Thu, 19 Aug 2021 21:01:47 +0000

Here’s what’s going on in the San Diego market and where we may be heading.

I was recently interviewed about how our real estate market is doing and where it may be heading. Our prices have increased by over 20% in the last year here. But if you want to predict changes in any market, you need to understand the supply and demand equation. Supply and demand are the basis for how the real estate market works. We dive into that and much more in this video exploring the housing real estate market in San Diego! We also cover:

Will our kids be able to own a home or will only Wall Street and only the Ultra-Rich own all the real estate?

Is there an Exodus from California and if so where are the buyers coming from?
How is the rental market driving housing prices? Is it more expensive to rent or own?
How is purchasing by large Wall Street institutions impacting the housing market and what this is showing us about investing in real estate?
What does the current supply of homes available for sale look like in San Diego?
Is the market and the rapid appreciation we’ve seen this past year starting to stabilize?

Feel free to watch the full message above, or use these timestamps that will direct you to various points in the video.

0:00 — Introduction to today’s topic

0:55 — San Diego has a bit of an exodus happening

2:05 — Homebuilding restrictions are preventing housing supply from increasing

2:55 — People from more expensive areas are coming to San Diego

3:45 — Prices can’t rise forever, but they don’t have to drop either

4:40 — Unless the market shifts rapidly (which is unlikely), we won’t see a large market decline

5:50 — It’s currently incredibly difficult to rent a house

7:40 — If you’re considering purchasing a home, now’s the time

8:25 — Wrapping up today’s topic

If you have any questions about our market or real estate in general, call or email me. I would love to help you.