CALIFORNIA - If you're looking to buy a home in the San Diego area, it might be helpful to know what to expect in the coming years. While demand is rising in San Diego, new construction is moving at a snail's pace. New single-family housing construction is slowing down, but multi-family housing construction is on a tear. Regardless, San Diego's housing market is hot, and properties are selling fast. On average, homes spend just seven days on the market. Because of this, it's essential to act fast if you're looking to purchase a home.
While inventory is at an all-time low, the market remains relatively balanced. There are only 1.4 months of inventory available in San Diego, meaning it's a seller's market. A balanced market will have four to six months of inventory. However, if the supply is less than a year, buyers dominate the market, and there are fewer sellers.
The San Diego County homeownership rate is comparable to the rest of the state, at 54.6% in Q2 2023. As interest rates rise and inventory increases, home prices will decrease. This will create space for new homebuyers, boosting homeownership rates in 2023-2024. Nevertheless, the rate won't increase until homebuyers begin to feel confident again in the housing market. After 2024, homebuyers will return to the area in greater numbers.
San Diego continues to be an expensive housing market. The median price of a single-family home in San Diego is $910,000. However, earnings have not kept up with the price increases. So, despite this, the median price of a single-family home in the region is expected to rise by nine percent in 2022.
While prices will likely rise over the next few years, a slowdown will occur after 2023. This would largely be the result of inventory increases. However, the decline in prices is expected to be gradual. It will take several years before the housing market reaches a bottom.
A rising number of buyers are looking for environmentally friendly properties. The design of new developments is changing to reflect this concern. Previously, developers focused on unit density and profit, but now, the trend is to incorporate green space, energy-efficient materials, and eco-friendly features.
While San Francisco and Silicon Valley lead the housing market, Southern California is starting to catch up. However, sky-high prices, mortgage rates, and cryptos hamper California's market. Moreover, the implosion of tech startups has negatively affected the housing market. If you're looking for a home, now is the time to start searching.
According to Zillow, the median home price in San Diego County was $910,000 in July and April and $497,500 in May. This means that median prices are not expected to decline significantly in 2022 and 2023. The median price of a two-bedroom house in San Diego County is $651K
