Factors that will affect whether San Diego home prices rise or fall in the next year

There are a few key factors that will influence the direction of San Diego's housing market in the next few years. Interest Rates, Housing Inventory, and the continuing rising home prices. Let's take a look at each one.

Rising Home Loan Interest Rates

Although the recent surge in mortgage rates has been a cause for concern for many Americans, it is important to remember that the current rates are still historically low. In fact, the average 30-year fixed-rate mortgage is just above 5%. as of April 2022. What this means is that, although rates have been rising lately, they're still at a level where buying a home is affordable for many people. So, even if interest rates continue to increase, we may not see a corresponding drop in home prices.

San Diego Housing Inventory

San Diego's housing market is on fire. According to the San Diego Association of Realtors, the number of homes available for sale has shrunk by 16.5% for detached homes and 36.4% for attached homes since this time last year, leading to a decrease in closed sales of 17.9% for detached homes and 27.1% for attached homes. Meanwhile, pending sales have decreased by 18.9% for detached homes and 18.7% for attached homes. In other words, there are fewer homes on the market, and fewer people are buying homes, but those who are buying are doing so more quickly. The fear of missing out mindset for potential home buyers may continue to push prices to climb. So if you're thinking of buying a home in San Diego, now might be the time to do it. But don't wait too long; who knows how long this housing boom will last?

San Diego Rising Home Prices: Are they slowing down?

San Diego is a great place to live. The weather is perfect, and the people are friendly. There is always something to do, whether it's going to the beach, hiking, or exploring all the city has to offer. And now, San Diego is one of the hottest real estate markets in the country. The median sales price for detached homes was up 19.3% to $1,000,000 in the second quarter of 2022, and the median sales price for attached homes was up 24.6% to $660,500. 

San Diego's housing market is among the least affordable in the nation, and a recent report suggests that affordability challenges are limiting buying activity. According to the report, homes may be cooling somewhat as a result of rising mortgage rates. Nevertheless, the new signs predict a price slowdown in the coming months. San Diego's housing market has been struggling for some time, and it is clear that affordability challenges remain a significant obstacle to overcome. Hopefully, the recent slowdown in price growth will give buyers some relief and help to improve market conditions in the region.