About the San Diego Real Estate Market
The New Equilibrium in San Diego Real Estate
“Low inventory drives prices up.”
The law of supply and demand is having a definite influence on the real estate market in San Diego as we move through 2015.
Serious buyers are crunching the numbers and realizing that a 5% increase in home prices would make waiting a year to save 5% more for a down payment an exercise in futility!
Serious sellers realize that there is something magical about low inventory that creates a price surge which may not be justified, real, or sustained. The buyer is vulnerable. “As-is” sales terms are more common. When inventory is low, multiple offers arrive. The prevailing party pays more than the market price. It’s that simple.
These quick facts tell the story…
- San Diego average home prices as of March 2015 had increased by 13.1% over March 2014.
- The number of active listings in this same time period fell by 8.8%.
- In a balanced market, the number of homes offered for sale equals roughly 6 times the number of homes sold in the previous month. This is referred to as “having 6 months’ worth of inventory.”
- Today in San Diego, we have only about 3 months’ worth of inventory.
- The average number of days on the market has also fallen by 8%, and now stands at 39.
Why are San Diego homes selling faster than new listings appear?
It probably has something to do with the fact that January 2015 polls by both The Conference Board of Leading Indicators and Gallup both show consumer confidence at the highest level since the economic downturn.
Marketplace conditions in the first half of 2015 are creating the most advantageous scenario to buy or sell in the foreseeable future. The time to act is now – not because we say so…but to exploit the best market conditions we’ve seen in years!
Keep in mind, however, that buyer preferences have largely changed.
The trend among buyers—particularly those under 40 and without families—is that they’re willing to keep their “tenant” status until they find an almost-perfect home. They want “shiny”—little to no commute, trendy shopping and eateries nearby, highly updated or move-in ready.
Savvy sellers who want top dollar for their homes are consulting their real estate agents before taking on renovations—just to make sure they’re making smart upgrades that will appeal to the buying public and improve resale value. Agents know what sells! Sellers are also putting homes on the market now in case the Fed’s recent actions result in higher interest rates, which could flatten buyer enthusiasm and cause prices to slide.
The good news for sellers: new buyers are entering the market as the San Diego economy grows.
In 2014 we added 43,000 jobs. This job growth, along with other factors, has heightened consumer confidence in purchasing real estate.
In the year ending July 2014, San Diego saw an increase in population by over 2% to a total of 3.21 million. The rental vacancy rate is currently 2.1%, down from 4.1% just one year ago. And tourism in San Diego, measured by nights booked, generated more revenue in 2014 than any previous year.
Clearly there is a pent up demand for housing in San Diego again.
With home prices increasing at a slow but steady pace, ally yourself with a real estate agent who will arm you with knowledge while you’re buying or selling a home. Confidence is the most important ingredient in a process that can feel like a roller coaster!
Whatever the market… Tom Dunlap sells homes.
San Diego’s real estate market in recent years has resembled a roller-coaster, but it makes no difference to Tom Dunlap. A consummate professional, he’s been through the downturns and the upswings many times, and through it all still gets the results his clients want and need.
Since 2009, Tom’s annual dollar sales volume has been in the top 1% of the 18,000+ REALTORS® in San Diego County.
When you want results, ask a busy person. When you desire discrete, value-added service resulting in a successful San Diego home sale, contact Tom Dunlap. He’s both confident and competent, and brings you the benefit of his skills, experience, drive, and a sincere desire to turn your real estate goals into reality.