San Diego is experiencing an exploding housing market in terms of both sales and prices. There are three variables explaining this surge.
One factor is that people are looking for properties with both more interior and external space. Many people living in apartments and condos didn’t necessarily spend a lot of time in their homes. With San Diego being an outdoor society, people spent quite a bit of time outdoors at the beach, hiking, etc. In addition, people would spend 40 or so hours at their workplace. But the working-from-home phenomenon is causing people to spend much more time at home which is acting as a catalyst for people to find a property with both additional interior and external space.
A second factor causing a dramatic increase in demand for housing right now is that the spring and early summer buying season was reduced causing demand to be slightly delayed. Buyers were a little bit hesitant to look at properties in April, May, and June until they knew more about the current environment. Now that the dust has settled and people have spent an abundance of time sitting at home, buyers are emerging from their apartments all saying the same thing: “We need to buy a home ASAP!”
One of my buyers is a young military gentleman. A nice home went on the market last Saturday. We raced to see it and prepared an excellent offer that same day. By Sunday the agent had 13 offers. The market for homes with a yard in the $400,000 to $900,000 range is currently off-the charts. Inventory is at all-time lows.
A third variable is that interest rates are artificially low, causing monthly payments to be reduced. Buyers can afford more than they thought and are pushing for the best house they can afford.
So what is ahead for 2021? I read lots of real estate newsletters and blogs. And the forecast for 2021 is a prime topic of discussion.
First off, if additional stimulus finally gets passed, that would be a positive for the housing market. If an effective vaccine gets approved, I believe that would be the greatest single positive for the housing market. Expect home price increases to follow. If for some reason, this virus issue does not get resolved and gets worse, that could hinder the overall economy and cause a tough 2021. Rent and mortgage delinquencies could again increase, and bankruptcies would grow.
I, like all of you, pray we are closer to the end of this pandemic than the beginning. Overall, in my opinion, I believe that 2021 is going to have strong economic growth and solid home price appreciation. I am actively trying to get my handful of buyers into homes quickly.
Market update (single family homes): In the 92115 zip-code, the median home price jumped to $649,000 with very little inventory of only 25 homes for sale. In the 92119, inventory of homes is even lower with only 16 homes for sale, less than one month’s supply and the median home price increased to an all-time high of $718,000! And finally in 92120, the median home price rose to a jaw dropping $812,500 with only 11 homes actively for sale.
Inventory is minimal across all zip-codes as well as listing and closed sales declined because there are so few homes for sale. Basic economics will tell you that’s a recipe for substantial home appreciation in the near-term.
—Sarah Ward is a Realtor with Fine & Coastal Real Estate. Reach her at email@example.com, or by calling 858-431-6043.