Soaring Heights in San Diego County's Competitive Real Estate Market

In the heart of San Diego County, the real estate scene has been nothing short of a rollercoaster, defying expectations and reaching new heights. Buckle up as we take a thrilling ride through the twists and turns of the housing market, where prices seem to have their own gravitational pull, persistently soaring near record highs.

Prices remain near record highs

Home prices in San Diego County are staying really high, and they're not budging much even though mortgage rates are going up. They hit the highest point ever in August 2023. In October, prices for the average single-family home and condos dipped a bit, about 4.5% and 3.9% below the August highs. But this kind of dip is normal in the second half of the year. We think prices will stay just a bit below the peak for the rest of the year. The number of homes for sale is going down, and there aren't many new ones coming on the market, which should keep prices from dropping too much. Homes in San Diego County are still kind of affordable, especially compared to the rest of California. More people are getting into the market, and that's helping to keep prices up. Even though it's usually quieter in real estate during the fall, there are still plenty of buyers, especially with mortgage rates being the highest in 23 years. People want the best home they can find, and they're willing to compete for it, despite the higher cost of financing

Single-family home inventory hits all-time low after 14-month downward trend

Okay, so here's the scoop on homes: there are fewer of them on the market than ever before. It's been going down for 14 months straight, which is not the usual trend. In October, the number of single-family homes for sale hit a record low, making this year's inventory patterns pretty unusual. Normally, there are more homes available around July or August, and then it drops until December or January. But this year, things are a bit different. Despite interest rates going up and not many homes to choose from, there were more new listings in October, boosting sales. When inventory is super low, the number of new listings is a big hint about how many homes will sell. In October, new listings went up by 3%, and sales jumped by 6%. But compared to last year, sales and new listings are down by 10% and 13%, respectively.

Now, because demand is slowing down a bit, buyers have more say in negotiations, and they're paying a little less than the asking price on average. In July, sellers were getting the full list price, but by October, it dropped to 97%. Expect the inventory to stay historically low for the rest of the year and probably into 2024. This low supply is likely to keep prices from dropping too much.

Months of Supply Inventory fell in September, indicating the market returned to a sellers’ market

Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market).

In October, MSI fell below three months once again. Currently, MSI implies a sellers’ market for both single-family homes and condos. Active listings in San Diego County fell from September to October, continuing the 14-month downward trend. Single-family home inventory hit a record low, highlighting the challenges of buying a home in a desirable market. 

Calling All Sellers

Now, here's the scoop for sellers: the limited number of homes available is making it tougher for buyers to find their dream home. So, if you're thinking about selling, it's a seller's market! Limited supply and growing demand are working in your favor. Buyers are out there, eager to make a purchase, and your home could be the one they've been searching for.

Let's chat about how to make the most of this market!