What is going on in the San Diego Real Estate Market in July 2020? Kyle Whissel talks about the leading indicators and what that means if you are trying to buy or sell in San Diego.
🔽 Homes For Sale Down ~ 17%
🔼 Homes Going Into Escrow Up ~23%
🔽 Inventory Down ~45%
What’s goin’ on in the San Diego real estate market in July of 2020? There are all kinds of crazy stuff goin’ on all around the world right now, but I want to just hone it in, and let’s focus on real estate. I want to tell you not what the media is reporting, which is typically information that’s two, three, four months old. I want to tell you what’s happening today in the market. So, if you’re thinkin’ about buying or selling, you know exactly what you’re gettin’ yourself into.
What we always focus on is what are called leading indicators. These are the things that have happened within the last 30 days, where the media is talkin’ about three or four months ago.
- The first number that we like to focus on as a leading indicator, is the number of new homes that have come on to the market for sale. That number is down 17%. What we’re seeing is a lot of people are just opting not to put their home on the market. They’re just not comfortable with people being inside their house. Most of the people that are selling right now are people who’ve already vacated their home or people that have to vacate their home, maybe for a job or something along those lines. Then, we’re also seeing a lot of people selling their homes that were former rentals. So, there’s just a lot less stuff coming on the market for sale.
- On the flip side of things, the number of homes that have gone into escrow is up 23%. That’s because right now mortgage rates are the lowest they’ve been in history. We’re seeing rates, you know, in the mid to high twos right now, which is unheard of, that’s never happened before. So, because the rates are so low, a lot of people are taking advantage of that and getting into homeownership, and also a lot of people are sitting in their rental apartment that they’ve had for a long time and realizing, I don’t want to live in this thing anymore. I’m ready to get a house. I’m ready to get some space. I want some room. I want a little elbow room. I want somethin’ with a pool or a yard. I want to have some fun with my family. So, we’ve seen demand pick up a lot, 23% increase in the number of homes going under contract.
- What is that doing overall? Again, the number of new homes coming on to the market’s down. The number of homes going off the market into escrow up. So, what that’s doing is that’s contracting the supply of homes for sale. That’s down almost 45% right now from the same time a year ago. And also, the time is taking for homes to sell. That’s going down as well, because there’s less homes for sale. It’s down 7%. So, what we’re seeing right now is a huge shortage of homes for sale on the market right now.
What does that mean to you? That’s the important part, right?
We know what’s goin’ on, now how does that affect you?
Thinking About Buying A Home Right Now?
First, if you are thinking about buying a home right now, when there is a shortage of supply, it’s going to be a little bit tougher for you to find something for sale, because there’s not a lot of options out there. But, what that’s doing is it’s causing prices to shoot up significantly. If we look at a lagging indicator, like when the media talks about, they’re going to talk about values are up around 5% over the last year. If you asked me what’s going to happen over the next 12 months, I think you’re going to see potentially double-digit appreciation when it comes to the value of the home.
So, while it might be a little bit tougher for you to find something right now, you’re buying in on an upswing, ’cause when inventory is down, prices go up. It’s always better to buy on an upswing than on a downswing.
So, just be patient, right? You’re going to have to maybe stretch your criteria a little bit to find the right home. But when you do, when you get in there, you get to watch that value shoot up.
We just had a client who bought their home back in August and had some things change in their circumstances. They needed to sell. They bought it for 790 in August. They’re selling it today for 860. That could be you. So think about that, right? It might be a little tough to get into something, but you can reap the rewards.
Thinking About Selling Your House Right Now?
Also, if you’re thinking about selling, I just told you, there’s nothing for sale. You’re the only show in town. It’s a fantastic thing. It’s a seller’s market right now. This is an insane time to get your home on the market, into cash out and sell out a very, very high price. So, whether you’re looking to move up into a new, bigger home, or you’re lookin’ to relocate, get out of state where you can get a little more for your money, you are going to get a premium for your home.
Especially if you have one of those homes, I was talking to a client the other day who has a home. It’s a small, little two bedroom, tiny lot, backs up to a freeway, no air conditioning. You know what I got to say? No problem. There’s going to be somebody who’s going to buy that house right now, ’cause there’s no other houses for sale. So, if you got one of those unique homes that has a little bit of, you know, little hair on it, we’ll say. This is a time to sell that home right now, because buyers are going to be more willing to accept that hair that’s on that deal.
So, hopefully this is beneficial for you. If you are thinkin’ about buying or selling your home here in San Diego, give us a call. 618-7997. Thanks for watching.
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