Is San Diego Real Estate currently experiencing a buyer's market or a seller's market? Not only does Jeremy McHone explain which market we're currently experiencing, but what that means to you if you are looking to buy a house or sell your home in 2020.

San Diego Real Estate October Market Update

In October, there were just under 1,600 homes on the market. So that's our inventory. Now, in order to really understand what that number means, we have to have some context behind that.

Because if there are 1,600 homes, but there are 3,200 buyers (Seller’s Market), that's a very different market than if there are 1,600 homes and there are 800 buyers (Buyer’s Market)

So the number we use to put that number into context is our month’s worth of supply. So our inventory is just under 1,600 homes for San Diego county, our months of supply is 1.8 months.

Now, what does that number mean? What they do is we take the inventory, which is just under 1,600. Then we take a number called the absorption rate. That's how many homes are coming off the market per month. We divide inventory by absorption rate, then we get what's called supply.

How many months worth of supply or how many months it would take to run out of homes on the market. That's our month's worth of supply. So right now in San Diego County, there are 1.8 months of supply.

What that means is in 1.8 months, if no other homes come on the market, all those homes will sell out.

So what does 1.8 months mean? In a balanced market, there's six months’ worth of supply. The lower you go below that, the more of a seller's market you go into. Above that, you go into more of a buyer's market.

So with 1.8 months, that means it's very low supply, which means we're in a seller's market. That means there are a lot more buyers than there would-be sellers. Because remember, if there was the same amount of buyers and sellers it would take six months to sell out. But right now the market would run dry in less than two months.

So to summarize, what does that mean if you're a buyer or seller? If you're a buyer, that means that you're going to be competing against other buyers on most properties because there's just not that many out there for how many buyers there are. On the seller side, that means that if you put your home on the market, you're probably going to be in a pretty good negotiation position. There's probably going to be multiple buyers that are interested in your property. Now, this was a quick overview. If you have more questions or what these numbers mean, I can dig into 'em a little bit more. Give me a call at 619-971-0791.

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