Market Update - March 2023
Market Action Index - March 2023
If you checked in last month you may remember that I called a stand off between buyers and sellers. I knew there wasn’t much movement, but I could have never predicted historically low movement! Per the San Diego Union Tribune, we had the lowest number of homes sold in February since 1995! On top of that, median home prices have dropped to roughly $750K. That means any gains in pricing year over year has been wiped out completely.
“If you’re currently renting, you’re paying a mortgage… it’s just not yours.”
Market Profile - March 2023
To recap: the mental state of buyers is the hope that prices continue to drop AND interest rates drop as well. Naturally, they’d like homes to be more affordable… and who can blame them! According to Bankrate.com, San Diego is the 4th worst market for First Time Home Buyers, primarily because of affordability. Those of us that live here understand how expensive it is and how difficult it can be to save for a down payment. According to the National Association of Realtors, the median percentage down payment for all buyers nationwide is JUST 12%. If you’re a buyer from ages 22-30 the median down payment is 6%!
Why bring it up? So you stop feeling bad about yourself. Most first time buyers have no idea what they can afford and in San Diego have almost given up on their dream of owning a home. There are so many options and opportunities for you to buy a home - YES - even in today’s market. I promise you, it’s not as bleak as it looks. The first step is to reach out so we can come up with a plan.
And how are sellers doing these days? They’re currently caught in a conundrum that requires some mental gymnastics and unfortunately more perceived risk than they want to take. Most sellers are in 1 of 2 boats… Boat 1: they’re upset that they didn’t sell last April at all-time peak prices. Boat 2: they want to sell but don’t want to trade their sub 4% rate for one close to 7%.
All that to say, we’re still in a standoff. The reality is that instead of home prices continuing to trend down, we’re still seeing them come up a little bit due to inventory. Buyer demand is still very strong despite the interest rates. And those with either tons of equity in an existing home, those who can pay all-cash, or have help from family are looking at this as a prime time to buy. If you can avoid paying today’s interest rates, then I really do think it’s a great time to buy. If you’re like me and you need to have a loan to buy a home, there are plenty of creative ways to get you a lower interest rate temporarily until rates drop. You just need to reach out because we’re one of the few Real Estate brokerages that has lending in house. It’s how we’re able to stay on the same page and make your life easy when you’re going through a transaction.
When will rates come down for good? My guess is next year based on how aggressive the federal reserve is as it pertains to inflation. We saw the inflation numbers tick up, which the FED responded with an interest rate spike.
“Rent is up over 28% in the last two years… a median 2-bedroom place in Encinitas is $3,500+”
”FYI my MORTGAGE is LESS than that!”
I leave you with this thought - If you’re currently renting, you’re paying a mortgage… it’s just not yours. San Diego is the 8th most expensive city to rent. According to the Union Tribune, rent is up over 28% in the last two years… currently to rent a 2 bedroom place in Encinitas you’re looking at $3,500+. I can tell you my mortgage is less than that! Not to mention, my wife and I are building equity and deducting what we pay in interest from our taxes.
If you’re considering buying or selling, please give me a call and let’s talk about if it makes sense to do it sooner rather than later.
College Basketball fans, enjoy March Madness! I also want to wish you a happy St. Patty’s day AND cheers to warmer and drier weather!!
P.S. I live on referrals (and will love you forever) if you send someone my way. It’s among the greatest compliments I can receive. I will treat them like family. Thank you in advance!
Brendan
Median Home Prices - San Diego March 2023
Monthly Sales - March 2023