San Diego Real Estate Market Predictions from Real Estate Experts
Brokerage co-owner and San Diego real estate veteran Donn Bree gives his 2024 real estate market outlook in San Diego.
What are your predictions for the first two quarters of the housing market in San Diego?
The San Diego real estate market is one of the strongest in the country with high buyer demand, low inventory, and an average home value of $896,575. Average home prices increased 14.8 percent when comparing January 2024 to the previous year.
The seller’s market that defined San Diego in 2023 will likely continue for 2024. That does not mean that buyers and investors should approach the San Diego real estate market without hesitation as prices are predicted to rise again this year.
Real Estate Market for Buyers
What should buyers consider with regard to inventory, mortgage rates, and new ordinances?
The US housing market is currently at an influx point with mortgage rates hovering around 6.5%. Due to the high rate of borrowing, buyer demand remains low, and current inventory is relatively stagnant. That being said, major rate changes are on the horizon and home values are forecasted to rise again in 2024. Buyers in the market should consider making a move within the next 60 days to take advantage of less competition, and strong negotiating power.
The next Federal Open Market (FOMC) meeting is March 20th and the current CME prediction calls for favorable rate easing. Lowering rates will draw more buyers to the market so expect prices to increase and bargaining power to decrease. Some lenders are already dropping rates as low as 5% in anticipation of these rate changes.
New California laws like AB-1033 allow homeowners in certain California cities to sell ADUs like condos – separately from main properties. This new law will increase the value of current ADU properties and improve the value of properties with ADU potential. This may be an important consideration for both parties if the property is suitable since zoning laws are changing to make housing more available.
Real Estate Market for Sellers
What should sellers consider with regard to inventory, mortgage rates, and new ordinances?
Reasonably priced turn-key properties have been, and will likely continue to be in high demand commanding top-of-the-market prices. Slow-moving, expensive, or stagnant inventory primarily consists of project or otherwise problematic properties; overpriced properties; and discretionary purchases, such as second homes and recreational property.
As such, undesirable property inventory levels will exceed the demand for the same, while well-priced quality inventory will remain in short supply.
A byproduct of these market conditions should be pent-up demand for the lower-end owner and non-owner-occupied properties, which will be activated by a downward movement of as little as 100 basis points in the mortgage market. Movement of inventory in the lower-end entry-level and investment real estate markets could trigger vertical movement in the discretionary market (second homes & recreational properties) in the second quarter.
In any case, don’t look for price tags on quality properties to roll back any time in the foreseeable future…
As a seller, this information should empower you to field as many offers as possible and maximize the value of your property listing. Work with a qualified, knowledgeable agent who can maximize your property’s marketing value and reach the largest amount of cash buyers.