Spring is perhaps the most exciting time in the real estate and mortgage industries. It’s a time full of expectation, a time when the sleepy lull of winter wears off and the energy, movement, and liveliness of spring sets in. This is the case across the country, including the San Diego spring housing market.
This year, like many others, spring is expected to be a busy season for the industry. But it will be unique in its own way. Let’s take a close look at spring of 2022, what we might expect going into the summer, and how we are preparing to meet the needs of San Diego buyers.
What’s In Store for the Spring Housing Market?
Inventory Remains Extremely Short
Inventory, or the amount of available houses for purchase, is one of the most important topics in the entire industry. Throughout the past two years (since the start of the pandemic, essentially), inventory has been low, at a time when demand remains surprisingly high.
Housing inventory in San Diego remains low. In the past, the amount of active listings was anywhere between 4,000 and 8,000 units, depending on the season and the market. But in the spring of 2020, unit count began to decline. In May of 2020 there were roughly 4,800 units in San Diego County, but that number fell to under 1,500 in January 2022. It has risen a bit (1,638 in March 2022) but that number is low.
This lack of inventory, it seems, is driving most of the other factors for the San Diego housing market in the spring of 2022.
Although Lighter Than Before, Pricing will Increase
Prices have been increasing steadily for years. This is due to a wide range of causes, including the simple fact that San Diego is an excellent place to make home. According to Redfin, a leading real-estate listing site, the median sale price for homes is currently $900,000. That means that half of the homes sold in San Diego are over $900,000!
Compared to the previous year, that’s an increase of over 28%. For a while now, we have been expecting prices in San Diego, as well as the rest of the county, to plateau. We’ve expected them to reach a point where they can’t go any higher, at least not in relation to overall inflation.
But they keep going up.
It seems that this trend can’t continue. Eventually, at some point, prices have to level off. Whether or not they level in 2022 has yet to be seen, but one thing is certain: prices are high and they are not going down.
Interest Rates will Likely Go Up (Nationally as Well as in San Diego)
The real estate market is heavily influenced by interest rates, which are guided by the federal government through the Federal Reserve. (They don’t set mortgage interest rates, but they essentially set the foundation on which all rates are built.)
Most experts expect mortgage rates to gradually increase. Currently they are still low, but there could be an increase in rates. This, in turn, could make purchasing a house even more expensive.
How are We Approaching the Spring Housing Market in San Diego?
Challenges remain all throughout the market, but it remains a great time to purchase. Most agree that the sooner you make a purchase, the more affordable it will be.
So how are we helping buyers adapt to the challenges of the San Diego market? Here are a few ways we are approaching the upcoming real estate season…
Loans for Self-Employed
In 2020 and 2021, there was actually an increase in the creation of new businesses. You read that right. During the pandemic, there was a record-setting rate of people creating new businesses. These people, like anyone else, need mortgage loans, so we are doing our part to make sure these people have available lending option, including mortgages that are practically tailored for small business owners.
Another important step we are taking is to include many non-qualifying mortgages in our list of options for the San Diego spring housing market. Non-qualifying mortgages are designed to help unique buyers who may not meet the specific demands of other loan products. They are not backed by government agencies like the VA, FHA, USDA, or even Fannie Mae, which is a government-supported company.
By offering these mortgages, we enhance the chances that you can find a mortgage that will fit your specific needs.
FastTrack to Improve Buyer Competitiveness
The San Diego real estate market is extremely competitive. It moves at a rapid pace, often requiring buyers to move quickly and place an offer that will be most attractive to buyer. Of course, the best strategy for having your offer accepted it to offer more money. But this may not be possible; sometimes you have to take creative measures, such as using FastTrack to increase speed.
Sellers know that a mortgage that moves faster results in a quicker sale, and they may accept your offer simply because the mortgage will close in less time.
Removing Contingencies to Speed Buying Process
One of the biggest delays for many purchases is the contingencies. There are contingencies like inspections and appraisals that need to be completed before the mortgage, and hence the purchase, can be completed. But what if you could increase the speed of your buying process by eliminating the contingencies? This would make your offer more competitive, and could help you make a purchase on the San Diego home of your dreams.
Through these efforts and more, we are approaching the San Diego real estate market in a creative and proactive way. We want to help buyers continue to purchase homes in wonderful San Diego, and these are just a few of the steps we are taking to help in your purchase!
Helping Homebuyers Purchase Outstanding Homes in America’s Finest City!
If you want help purchasing a home in San Diego with an affordable mortgage, contact our team today. We’ll work with you to find the right loan for your unique needs!