Activity picked up across the board in the final week of February.
New listings and new pending sales were very much in line with each other.
Inventory ticked up by about 100, despite 80 listings expiring or canceling last week, suggesting roughly 180 fell out of escrow during the week.
Speaking of inventory, Redfin came out with a study that put some data behind the idea that homeowners are holding onto their homes for a lot longer than they used to.
This phenomenon is heightened in California where already high prices and appreciation on top have had a much larger impact on overall affordability. For San Diego, the median is up to 15 years. That is up from a median of 7.4 years in 2005, and higher than the national median of 11.9 years.
Click here if you want to dive into that study.
Median price ticked up again last week. It looks like we’ll end up around $855,000 for the month of February.
That’s a dramatic rise! Combined with January appreciation, that puts us up about 6% since the beginning of the year.
The national purchase mortgage application index has been falling steadily since January as interest rates have gone up.
We clearly aren’t feeling that yet in San Diego, but it could be a sign that demand will fall in the next couple of months.
At the start of the year I was thinking we’d land somewhere between 5-7% appreciation for the year.
With February in the books, we’ve already seen 6% and we have a few months left of a prime buying season that usually drives prices higher. It seems like I might have been a bit too cautious. 🙂
It appears we still have a few more % points of appreciation ahead of us in the coming months.
We normally see a 2-4% decline in Q3-Q4 – I’ve been thinking mortgage rates would be declining during this period which might counteract this seasonal decline. If that happens, I expect we’ll end up north of 7% for the year. That still seems possible…
…but if rates remain at their current levels I’d expect we’d see a similar seasonal decline this year, if not more, and end up within that range.
Because I’m a conservative dude, I’m leaning towards the latter of those two options. But I fully admit both scenarios are very possible.
This is why predictions are a fool’s game… yet I committed to you to keep doing them, so I guess I’m a fool. 😜
How’s Brian feeling this week about the San Diego market?
Optimistic, but still playing it cautious… 🙂
- 3-month outlook (May 2024) – inventory will increase. We’ll see another 2-3% appreciation over February.
- 6-month outlook (August 2024) – inventory will be higher than in May, and values will peak in May as usual, then flatten out and fall from there.
- 12-month outlook (February 2024) – sticking to the 5-7% range of annual appreciation for now.
Disclaimer! This is not investment advice. I might be wrong. You make your own decisions.
Other Relevant Local News
- San Diego home prices rise fastest in the nation in 2023.
