How is the January 2017 real estate market doing?
First I want to focus on the number of homes sold in 2016 vs. 2015. That number is only up about 1.2%, which is still relatively flat. The good news is that the median home price jumped up 6.5%. That means if you bought a home in 2015 for $400,000, that home would have been worth $425,000 as of the end of 2016.
If you think about it, the average rent in San Diego is about $2,000 a month. As a homeowner, instead of paying $2,000 a month, you made $2,000 a month in the equity of your home. That is the beauty of owning vs. renting.
Where is the market headed in 2017? I like to focus on leading indicators rather than lagging indicators. The media focuses on lagging indicators, or things that already happened. We report on leading indicators so that you know what will happen.
First of all, the number of new homes for sale on the market dropped 7.2% last month. Now, it is normal for fewer homes to come on the market in the winter, but 7.2% is a pretty big drop. We also saw a jump in the number of pending sales; pending sales went up 13.9%.
Fewer homes coming off the market and more homes getting sold left us with a huge shortage in the number of homes for sale. That number is down 24.8%. We only have 1.5 months of inventory. A normal market has six to eight months of inventory.
If you own a home and are thinking of selling, this is exactly the kind of market you have been waiting for, as there is not much competition. If your home has a few issues (backing up to a freeway, close to an industrial park, next door to a cemetery), you might have a much easier time selling that home in this market than you would if you were in a down market.
If you have any other questions about our current market or if you are interested in selling your home, give us a call or send us an email. We would be happy to help you!