Last year was anything but normal… San Diego has been one of the hottest real estate markets in the U.S. Sales prices reached new heights, inventory hit rock bottom, and homes sold in record time, often for well above asking price. Mortgage rates, which began the year at historic lows, remain attractive, and homeowners who choose to sell in the coming months can expect to see plenty of buyer activity due to pent-up demand during the pandemic.
The Median Sales Price was up 14.1 percent to $850,000 for Detached homes and 19.4 percent to $585,000 for Attached homes. Days on Market decreased 12.0 percent for Detached homes and 19.2 percent for Attached homes. Supply decreased 50.0 percent for Detached homes and 75.0 percent for Attached homes.
Inventory decreased 51.6 percent for Detached homes and 69.2 percent for Attached homes.
With the U.S. economy booming, and with inflation at its highest level in nearly 40 years, the Federal Reserve recently announced the accelerated tapering of their bond purchasing program, now set to end March 2022. A series of hikes in the federal funds rate will likely follow. Economists expect the cumulative effects of these efforts will move mortgage interest rates higher through the end of 2022. Although still low by historical standards, an increase in interest rates may serve to soften buyer demand somewhat as affordability becomes a more influential factor in home purchases. Price growth is expected to slow somewhat as a result, but affordability will likely remain a top constraint for some homebuyers.
What Does This Mean for Buyers?
Just remember, rising rates and prices are a great motivator for you to find the home of your dreams sooner rather than later so you can buy while today’s affordability is still in your favor.
What Does This Mean for Sellers?
Make no mistake – this sellers’ market will remain in 2022 as home prices are projected to continue climbing, just at a more moderate pace. Selling your house while buyer demand is so high will truly put you in the driver’s seat.