The New Equilibrium in San Diego Real Estate
“Low inventory drives prices up.”
The law of supply and demand is continuing to have a definite influence on the real estate market in San Diego as we move into 2017.
Trulia reports that average square foot price of homes in San Diego rose by 8% in 2016 – which shows serious buyers that waiting a year to save 5% more for a down payment is an exercise in futility!
Serious sellers realize that there is something magical about low inventory that creates a price surge which may not be justified, real, or sustained. The buyer is vulnerable. “As-is” sales terms are more common. When inventory is low, multiple offers arrive. The prevailing party pays more than the market price. It’s that simple.
These quick facts tell the story…
- In a balanced market, the number of homes offered for sale equals roughly 6 times the number of homes sold in the previous month. This is referred to as “having 6 months’ worth of inventory.”
- As of October 2016, San Diego had just over 2 months worth of inventory, a figure that is down 25% from October 2015.
- Properly priced San Diego homes are selling, on average, in fewer than 50 days on the market.
Why are San Diego homes selling faster than new listings appear?
It probably has something to do with the fact that polls by The Conference Board of Leading Indicators and Gallup both show consumer confidence rising. It also has to do with the desirability of living in San Diego.
Regardless of low inventory and high demand, sellers should keep in mind that buyer preferences have largely changed.
In spite of high demand and low inventory, some homes do expire off the market unsold. Price and condition are still important.
The trend among buyers—particularly those under 40 and without families—is that they’re willing to keep their “tenant” status until they find an almost-perfect home. They want “shiny”—little to no commute, trendy shopping and eateries nearby, and homes that are highly updated and move-in ready.
Savvy sellers who want top dollar for their homes are consulting their real estate agents before taking on renovations—just to make sure they’re making smart upgrades that will appeal to the buying public and improve resale value. Agents know what sells!
The good news for sellers: new buyers are entering the market as the San Diego economy grows.
According to the San Diego Business Journal, 2016 job growth in the education, health care, leisure and hospitality, and professional, science, and technology sectors is up from 2.7 to 3.3% over 2015.
Clearly there is a pent up demand for housing in San Diego again.
With home prices increasing at a slow but steady pace, ally yourself with a real estate agent who will arm you with knowledge while you’re buying or selling a home. Confidence is the most important ingredient in a process that can feel like a roller coaster!
Whatever the market… Tom Dunlap sells homes.
San Diego’s real estate market in recent years has resembled a roller-coaster, but it makes no difference to Tom Dunlap. A consummate professional, He’s been through the downturns and the upswings many times, and through it all still gets the results his clients want and need.
When you want results, ask a busy person. When you desire discrete, value-added service resulting in a successful San Diego home sale, contact Tom Dunlap. He’s both confident and competent, and he brings you the benefit of finely honed skills, experience, drive, and a sincere desire to turn your real estate goals into reality.