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The San Diego Housing Market: Where are We, Where Might We be Going?

San Diego, for good reason, is one of the most attractive places to live in the entire country. Visitors to our wonderful city, as well as the general area, see firsthand why the San Diego housing market is regarded as one of the most vibrant and gorgeous locations in the U.S. There’s a reason why so many people choose to make this area their home.

Certainly not without its challenges, the San Diego market continues to soar, with plenty of activity for anyone on the real estate industry, including real estate agents and mortgage agents alike.

Where is the San Diego Housing Market Now?

To get a good idea of the overall market, it helps to take a look at a few important statistics. While there are many stats that you can analyze, one of the most important is overall housing prices. This is, after all, a major concern for both buyers and sellers.

As you might suspect, San Diego, while not the most expensive housing market in the U.S., is near the top. According to numerous housing-market-information sources like Zillow and Redfin, home prices in San Diego, many of the suburbs, and California all remain high.

Market

Redfin Median Price

Zillow Median Price

San Diego (City)

$692,500

$720,031

Carlsbad

$964,172

$969,288

Chula Vista

$581,000

$608,675

El Cajon

$595,500

$591,889

Escondido

$600,000

$598,785

San Diego County

$660,000

$670,649

California

$616,000

$609,757

United States

$335,519

$263,351

Note: The values cited above are based on the available information when this article was written. Both Redfin and Zillow constantly update their numbers, so figures have likely changed.

These numbers aren’t surprising. They merely support what is basically common knowledge: the San Diego market, as well as the California real estate market, is full of high-priced homes. According to both sites, the median price for a home in San Diego is over twice the price of a median home in the United States.

In areas like Carlsbad, the price can be even higher. On both sites, the median home value was nearly $1 million. This means that (very roughly speaking) about half of all homes for sale in Carlsbad will be over $1 million.

There are positive signs for the market as a whole, but a lack of inventory (which contributes to higher prices) still hurts the market.

Relatively high employment and quality jobs for many of our residents allow us to enjoy a strong (but not perfect) economy. This continues to strengthen the housing market, and contributes to increased market activity and excellent home prices.

What Will Happen in the Future?

While prices have been high for years, the housing market in San Diego actually gained in overall home values. According to Zillow, San Diego home prices went up 10.9% in the past year, a trend which they forecast will continue into the following season. Their forecast calls for an increase in home values of 11.3%, which means prices will go even higher, despite an already high-priced market.

Similar numbers are predicted for all of San Diego County as well as the state of California, although state-wide numbers, while still strong, will lag behind slightly. Across the U.S., the rate of home-value growth is expected to catch up with the San Diego market. Last year’s growth was only 7.5%, which was certainly a strong number nationwide. However, the pace is expected to increase, with a national growth of 10.3% for the following year.

The lack of inventory, as we noted above, will continue to steer the San Diego housing market. Until we see more available housing, you can expect the rise in prices to continue. However, if COVID-19 starts to decline, more housing could come to the market, which means a higher supply and a potential slowdown in prices.

What It All Means to Home Buyers, Sellers, and Investors

The San Diego real estate market presents a variety of challenges for homeowners and investors alike.

If you are a first-time buyer in San Diego, you may want to shop now before prices go even higher.

Buyers

From a buyer’s perspective, especially first-time buyers, the time is right for purchasing a home; if you wait, you could be paying a higher amount for the San Diego home you desire.

How much more? The median price for a home in San Diego, according to Zillow, is right about $720,000, so we’ll use that as an example. If their predictions are accurate and home values increase 11.3%, this means a home valued at $720,000 will be valued at $801,360. That’s an increase of over $81,000 for the same home in just one year.

If you’re considering a home in the San Diego market, and your finances are ready for a purchase, you may want to start the process soon before prices go even higher.

Sellers

If you are a homeowner in the San Diego area, you own one of the most sought-after pieces of real estate in the country. With potential increases in prices, there is a temptation to hold onto your house and wait for prices to peak. The issue with this strategy, however, is that you’ll likely be buying a home as well as selling your own. So while you can fetch a higher price, you’ll also pay a higher price; it could come out as a wash either way.

The only issue here is interest rates. It may be better to sell your home and purchase a new one, with a new mortgage, before interest rates rise. But this is a national factor, not one specific to San Diego, California.

Investors

The same principles that drive buyers (desire to buy before prices increase) will also motivate investors in San Diego. While commercial real estate may be under different conditions, investors in residential property will want to buy as soon as possible. Landlords can expect higher demands for their properties, especially if inventory is low, which could allow them to receive higher rent checks from tenants.

Thanks to many factors, San Diego real estate is growing. Buyers, sellers, and investors should be well aware of the current market to ensure they make the right choice for their future.

Helping with Any San Diego Real Estate Purchase

If you want to purchase a property in the San Diego market, contact our staff today. We’ll use our common-sense approach to mortgage underwriting to help you get approved as soon as possible. From first-time buyers to experienced investors, we can help you get the right mortgage for your goals!

CONTACT SAN DIEGO PURCHASE LOANS TODAY!

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