I know I’ve been pretty focused on talking about san Diego housing prices lately and I promise I have some other great content for the blog planned that isn’t just San Diego home price related but I had to get this out there.
Median San Diego Housing Price
I was looking over the latest San Diego real estate stats and holy moly. If nothing changes significantly in the market and we are already closing in on the end of the month. The median home price in San Diego is going to be $875,000 for May 2021. That is a 4% jump from April. 4% in 30 days!
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I don’t think anyone could have possibly predicted how this real estate market is going in San Dieog and the rest of the country for that matter. I’m in it every day trying to get home buyers into homes. It is so incredibly hard to be a home buyer right now. If you bought a home in San Diego in the last 12 years or so it probably felt competitive. It’s been in seller market territory for as long as I can remember but for the home buyers today, this is a totally different animal.
Bidding Wars
I am seeing the same thing all the way across the board. Multiple buyers for homes in just a couple days, all offers over the for sale price. And not just over, way over. $50,000 or $100,000 or even more in some cases.
It used to be in order to buy a house, it was actually pretty simple:
- You save up,
- apply for a loan,
- get approved,
- find an agent,
- find a house,
- negotiate,
- you close escrow 30 days later and congratulations,
- you are a home owner.
Not today. Getting approved for a loan is just the beginning. In order to buy a house right now, you need to have cash. A lot of it. And I don’t mean just for a down payment. It’s going to take money to win those bidding wars and absorb costs normally paid by sellers in balanced markets or at least slightly more balanced markets. If you don’t have the cash reserves, it’s borderline impossible at the moment.
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I’m not trying to step on your home buying plans or dreams, I just want to level set for what you should expect if you are out home shopping or thinking about it right now. This market is on a whole new level. I don’t think anyone has seen anything like this. A median home price in San Diego at $875,000 just blows my mind.
The Good News About The San Diego Housing Market
Here is the good news: This will not last forever, in fact I think the appreciation starts to slow down soon. The reason for the crazy price increases are pretty simple to explain:
Low inventory of homes to buy and record low mortgage interest rates.
While mortgage rates haven’t started rising up yet, they will. The price appreciation slowdown will likely come from an increase in homes for sale inventory. I know I said in a previous blog post that I was expecting rising interest rates to be the factor to slow things down but the latest statistics are in and April saw a large influx of homes on market for sale.
About a 10.5% increase in homes for sale for the entire country. That’s good news because we need it. Hopefully we see even more inventory through May and into June. It will be a huge relief to a lot of people, myself included. It’s hard to be a home buyer right now, it’s hard to be a home seller right now, it’s hard to be a realtor right now. More balance will benefit everyone.
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