2024 San Diego housing market predictions
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The tug of war over San Diego being a buyer's or seller's market will likely continue this year, but more palatable mortgage rates and upticks in inventory could open doors for buyers.
Why it matters: Many homeowners and wannabe buyers stood still in 2023, waiting for rates to drop before they made a move, Axios' Brianna Crane writes. Local real estate experts anticipate more action in 2024.
What they're saying: There's an expectation for interest rates to continue to drop, which will renew interest from buyers and sellers that should help boost inventory, Spencer Lugash, a local real estate broker and president of the San Diego Association of Realtors, said.
- "That's a big factor in the affordability of homes to allow more buyers into the market and re-spark some excitement around real estate in San Diego," he told Axios.
What's happening: San Diego's housing shortage and low inventory means it's a good time to sell, according to Julie Chang, a local agent with Pacific Sotheby's International Realty.
- Houses are still moving well because there is demand, but pricing a home correctly is critical.
- Sellers should understand that owning a condo downtown doesn't have the same demand as a single family in North Park.
Zoom in: Inventory has increased over the past year and houses aren't getting dozens of offers anymore, so it feels like less of a frenzy than prior years.
- Yes, but: Many buyers are priced out of the market and those looking in a specific zip code, at a set price point with unique characteristics are finding few options.
- Plus: Availability and cost of homeowners insurance is worsening for Californians.
Reality check: "There is no point to predicting what is going to happen because none of us control market forces," Chang said.
- Housing doesn't exist in a vacuum and there are outside factors like the bond market, stock market, jobs, inflation, war and other macro events that impact the industry.
The big picture: If the economy is steady, rates could land around 6%. If the economy stumbles, mortgage rates could fall more significantly, predicts Greg McBride, Bankrate's chief financial analyst.
- No one can say with certainty just how much mortgage rates will change because they are impacted by inflation and the Federal Reserve.
Between the lines: Lower mortgage rates won't clear all buyer hurdles, and actually could push home prices higher if demand surges and inventory remains low.
The bottom line: Make the best decision with data available now and buy with the ability to hold for seven to 10 years to weather a downturn, Chang suggests.