In 2015, San Diego’s real estate market was rated as the sixth hottest in the country. However, residents or people looking to buy today should expect much more modest returns and gains on their initial investments. While the market still continues to increase, Zillow estimated that last year had slowed to just under a 2% annual increase. Experts looking forward suggest that future growth will likely be about half of that at a modest 1%.
Before you try to project real estate outlooks too far into the future, it is important to see just where the San Diego market has come from with regards to the 2008 housing and economic crisis. San Diego did experience a decline in value during that time, but then in 2010, the market stabilized and started to climb. Following a short dip in 2011 and partly into 2012, San Diego’s market has made a steep climb in house value, with median home values rising from around $350,000 in 2012 to a $635,000 in July 2019.
However, rather than believe that San Diego is an anomaly in its current market growth projections, it appears to be a national reflection with slower growth appearing in major metropolitan areas.
After the economy started to turn around following the 2008 housing crisis, the construction industry found itself with too few builders and too few homes. The demand for homes outpaced availability and drove prices steeply upwards. However, it appears that the housing market is finally starting to catch up with demand, and prices appear to be leveling out.
While the availability of houses is not oversaturated with available houses, the past 12-18 months have seen the most drastic increase in home availability over the last housing boom. San Diego is currently considered one of the top ten housing markets in terms of inventory growth for metropolitan-sized markets. Additionally, the ten markets with the largest gains are also among the most expensive homes.
When you also combine the stabilization of home prices with San Diego’s markedly low unemployment rate (around 3.4%), a turnover rate of 9%, and climbing homeownership rates, it all leads to the outlook that 2019 should be a continued strong year for sellers, but buyers will also gain some leverage in a slight slowdown of the market. Individuals who are looking to offload their homes quickly may have some trouble turning them over quickly and may accept offers under the market value from the right buyer.
However, buyers will also need to be aggressive in their stance when they make offers on their dream home. While you might be able to negotiate a lower price or for some additional concessions, getting greedy during the remaining time in 2019 will likely lead to a seller passing you by.
Another factor to consider is that the construction market seems to have finally come close to matching the need for new homes. Construction will likely begin to slow so that they do not flood the market with brand new homes, and this can help to maintain a steady increase in both prices and available properties.
All in all, it appears to be a good time for people to purchase or sell their homes. Although the growth has slowed down, the market continues to show positive and sustainable momentum that can mean it is a great time to purchase your new home.
If you have decided that it is time for a move, contact Pacific Realty Group today 888-452-0974. Our professionalism, knowledge, and expertise cannot be beaten in the San Diego area, and we would love to show you the difference that working with us can make.