What happened in the 2017 real estate market, and what can we expect from 2018 here in San Diego?
2017 was very much what we predicted. We had a stable year of growth, with appreciation rates of 5% to 8% across the San Diego area. That is some nice, healthy appreciation – around a half percent per month. We can have that kind of appreciation for years and years. We couldn’t do that with the crazy appreciation levels we used to get, like in 2008 when prices would drop 20% to 30%, or 2012 when they would go up 20% to 30%. A 5% to 8% appreciation rate is very healthy.
As we head into the 2018 market, a big factor to pay attention to is all of this tax reform stuff. We’ve shot a couple of videos on it. Although there were a lot of things we were really concerned about in the House and Senate versions of the bill, the final bill doesn’t really affect the San Diego market as much as it affects other parts of the Midwest. However, thanks to San Diego home values, we won’t see a huge, negative effect from the tax reform bill.
2018 should see very similar growth, with home prices appreciating 5% to 8% annually. That’s because housing inventory is still extremely low. There simply aren’t enough homes for sale on the market.
A normal, healthy real estate market has six to eight months of inventory. San Diego only has two to three months of inventory, which is half the amount of inventory we would normally have.
As long as inventory stays low, prices are going to go higher, so I’m confident that we will see 5% to 8% appreciation across the board in San Diego County.
There are a few emerging neighborhoods to keep an eye on in 2018, such as:
- Imperial Beach. There is a lot of awesome stuff opening in Imperial Beach, from hotels to shops to restaurants. Our friends at City Tacos will be opening down there.
- Barrio Logan. This used to be the roughest part of San Diego, but there has been a lot of cool development and there are a lot of great new bars, restaurants, and breweries.
- La Mesa Village. There are many great new businesses and restaurants there now that those old antique shops are closing and moving out.
- Santee. Santee is one of our favorite neighborhoods—in fact, I live there! There are some great schools and the area has great safety ratings. There are a lot of new homes coming into Santee as well.
If you plan on buying or selling a home in 2018, or if you have any other questions about the market, just give me a call or send me an email. I would be happy to help you!