Since 2020, the local real estate market has been like a dueling thermostat in an office staffed with men and women: hot, cold, hot, cold, hot, cold.

When COVID and the corresponding lockdowns hit our shores in early 2020, the housing market froze. Never in the history of mankind had there been a quarantine of healthy people and an intentional shutdown of society. The global quarantine was unchartered territory.

People were worried about their health, the health of their loved ones, they feared death, many wondered if we were at the beginning of The Black Death Bubonic Plague that wiped out 50% of 14^el Century Europe and produced mass graves (the hype was that extreme).

Second to health concerns were financial. 

In real estate land, many agents expected a market crash or at least a downturn. We knew businesses were closed, people were not going to work, the money spigot was turned off, and government checks could only go so far. The future seemed dark and uncertain.

As two weeks to “slow the spread” turned to months, job losses that seemed temporary felt they could become permanent. Businesses that knew they couldn’t weather the storm went under. There was talk about people firing-selling their homes to stay afloat.

On a self-survival level, agents worried about their livelihoods. Agents’ income is commission-based. With no salaries, no unemployment benefits, and few sellers selling and few buyers buying, Realtors were understandably panicked.

Many of the homes I was about to list hit the pause button. 

Buyers took a wait-and-see approach. Then something shifted; an unexpected and incredible change took root, and in the summer of 2020, the market took off like a rocket on 747 jet fuel. The second half of 2020 saw the number of La Mesa homes sold increase 49% over the first half.

2021 continued the smoking hot market. With 20/20 hindsight, it’s easy to see what happened.

1^{S t} The interest rates of 2020/2021 were historically low, hitting a bottom of 2.65%

2^{Dakota del Norte} Because people were not dropping like flies, our sidewalks were not covered in corpses, and COVID protocols didn’t make sense (wear masks when walking into a restaurant but remove them when sitting, keep masks on between bites on planes, absurd one-way arrows at grocery stores, big box stores remaining open while mom & pop shops closed), the public’s fear of COVID abated, and the desire to return to normalcy increased. Part of normal behavior is real estate shopping.

3^rd With schools, restaurants, bars, and gyms closed, our homes became our 24/7 sanctuaries. People wanted the room to homeschool their kids, entertain their friends and family, exercise, and work remotely. Homes with ample space, home offices, yards, decks, and patios became highly desirable.

4^el Unlike the service, hospitality, and construction industries, people who worked for the government or in computer and Zoom–based jobs didn’t suffer income loss. They could buy homes, and they did.

To illustrate the frenzy of 2020 – 2021, I was hired to sell a 2,400 S.F. Mount Helix home on Butterfly Lane. The comparable sales were approximately $1.2M. Because the market was lava hot, we listed for $1.4M. Our first Open House attracted some 200 attendees who submitted a stack of offers, driving the final sales price to $1.8M.

Flash-forward to Spring 2024. I was hired to sell a home in La Mesa Village. I suggested a list price of $1.5M. Instead of selling in minutes, we procured one full-price offer of $1.5M the second weekend it was on the market (still pretty darn good). The sellers were crushed that they didn’t receive a stack of offers and a bidding war. We are NOT in that market.

While the average price of La Mesa homes exploded 48.5% from 2019 (the year before COVID) to 2022 (the first year of the market cooling), they only increased by 0.5% from 2022 – 2023.

That is a cooling market.

Interest rates remain high for this era, currently at 7.5% – 8.7%, and the reality is a mortgage (Principal + Interest + Taxes + Insurance) for an average-priced home in La Mesa ($1,057,101) is over $8,000 per month.

Buyers need an income of at least $200,000 per year and they need to be head-over-heels in love with the property, or the house needs to be a good deal, and/or there is an Accessory Dwelling Unit (ADU) to help cover the mortgage – one of the reasons homes with ADUs are in high demand.

So, sellers, price accordingly and make your properties as appealing as possible without remodeling (sparkly clean, uncluttered, and repair obvious problems). 

– Reach eXp Realtor and La Mesa Vice Mayor Laura Lothian at: [email protected].