Short answer: Yes. But let’s take a quick look at the stats we’re riding on into the New Year.
San Diego County Home Sales Comparing November 2020 to November 2021
Median sales price for a single-family home was $750,000 in 2020 compared to $860,000 this year, up 14.7% YOY.
Median sales price for an attached home in 2020 was $475,500 compared to $595,000 this year, a whopping increase of 25.1% YOY. Demand for condos increased sharply as buyers who normally would buy a single-family home were priced out of that market.
The number of closed sales was also down significantly. Single family home sales were down by 12.3% and attached homes by 11.6%, both numbers reflecting a shrinking inventory with fewer homes available for sale.
So here is what I believe we will experience in the 2022 San Diego real estate market:
- Home prices will continue to increase, but at a slower rate, perhaps closer to 10 or 11% YOY. Price increases may be slightly higher for attached homes as higher prices continue to squeeze buyers out of the single-family home market.
- Interest rates will increase slightly, but still be low enough to keep home buying attractive.
- It will continue to be a seller’s market in most areas. Homeowners are reluctant to sell as a replacement home might be too expensive unless moving out of the area.
- New housing starts will continue to be slowed by supply chain issues and the resulting high price of wood and materials, thus keeping the pressure on the re-sale market.
- As more and more people work from home and commute times become less of an obstacle, we will see the popularity of outlying areas of the county increase.
- First-time buyers will continue to be at a dis-advantage as they do not have a sizable down payment from a home sale. Competition for FHA or VA approved condos is fierce and buyers with larger down payments have a distinct competitive advantage.
- San Diego investors will continue to scramble to find any deal that makes financial sense for either a fix and flip or buy and hold rental property.
The good news is that we’re lucky enough to live in San Diego County, no matter how crazy the market. If I can be of assistance to you, your friends, or families, please give me a call. Best wishes to you and yours for a happy, healthy, and prosperous New Year!
Statistics courtesy of SDAR. Photo courtesy of Parade.com.