Here’s how the latest market trends are affecting buyers and sellers.
With inflation on the rise, home inventory levels increasing, and interest rates remaining flat, what are buyers and sellers to make of this market?
First let’s look at home inventory. We finally have more than 2,800 homes available in San Diego County—the first time that’s happened since the second week of January. For comparison’s sake, before COVID hit back in March 2020, we had 5,400 homes available. Under normal circumstances, we usually have somewhere around 8,000 homes available. As you can see, we’re still far under what’s considered normal. We don’t know whether this is a trend or a temporary blip, but it’s a good sign as far as normalizing our San Diego market. We’ve seen tremendous buyer demand and very few homes available, which has caused rapid appreciation (20%) over the past year.
What’s going to happen with rising inflation? We don’t know exactly yet, but interest rates will likely start to rise to dampen this effect. Once this happens, buyer demand will decrease, which will normalize prices. I think it will take a while for these things to play out, and economists are saying there is no real estate bubble. Along with low home inventory, there’s very little building happening overall, so nobody’s forecasting a decline in prices anytime soon.
If you’re thinking about selling, it might be a good time to put your home on the market and get top dollar. If you’re thinking about buying, prices may be stabilizing, and you should know that we’re seeing fewer offers being made on properties in general. Instead of 15 to 20 offers, a home may now only receive four or five. This could be buyer fatigue setting in, but it’ll be interesting to see how this trend continues. In any case, get pre-approved so you’re ready to make an offer on a house right away.
Whether you’re buying or selling, give me a call so I can strategize with you on getting the best deal possible. If you have any other real estate questions, feel free to reach out to me as well. I look forward to hearing from you.