LOL! What the heck is “normal”? Here’s an update as of August 30 to give you an idea about how the market is trending.
To put it simply, the San Diego County market is still hot with prices increasing and supply dwindling. In August, the median price for a detached home rose to (gulp) $850,000. That is 15% higher than the median price one year ago. Not surprisingly, the inventory of homes for sale in August was 39.1% lower than 2020. The number of days on market was also lower with it taking an average of just 20 days to get under contract this year, compared to 28 in 2020.
This trend was even more pronounced in the attached home market, likely because the buyers who might have purchased a detached home are now priced out of that market. The median price of an attached home in August was $560,000, which is 18.9% higher than last year. Likewise, the number of condos and townhomes for sale in August number just 950, compared to 2,172 a year ago. That is a whopping 56.3% less inventory. Days on market were also significantly reduced from 29 in 2020 to just 18.
However, despite these dramatic numbers there were two statewide indicators worth noting: 1) Redfin agents in California reported a decline in bidding wars. In April of this year, 74.3% of their offers faced competing offers while in August that number dropped to 58.9%. 2) The California Association of Realtors reported that in August 67% of homes sold above asking price which is down from 70% in July.
While interest rates and inventory remain low, I believe we will continue to see a strong seller’s market. However, as noted above, competition may be decreasing as more and more would-be buyers are simply giving up and opting to rent for the time being. This has put a strain on the rental market where monthly rents have increased over 11% nationwide thus far in 2021.
So is this a good time to buy, sell or hold? Now is definitely a better time to buy than it was earlier this year, and it could be even better as we head towards the holidays when many buyers put their search on hold, thus decreasing competition. If you are considering selling your primary residence, I hope you are moving to somewhere less expensive otherwise it might not make economic sense. For investment property owners, this is a great time to hold as you should be able to charge increased rents and replacement properties are priced so high positive cash flow is difficult.
I’ll be sure to keep you posted as we see what trends unfold here in San Diego over the next few months of 2021. Questions? Please don’t hesitate to give me a call, and of course, your referrals are always appreciated