Housing prices in the Southern California area, San Diego included, are historically high when compared to the country average. Is there any prediction for when housing prices will drop in San Diego? What is the forecast for the next year?
Several factors influence the high housing price in San Diego, and those factors are likely to continue to be important and influence those prices in the immediate future.
So let’s talk about these factors and what are the predictions for 2022.
Housing Prices in San Diego
Ever since its foundation, the cost of houses in San Diego has been higher than the national average. Initially, this was due mainly to the quality of living in the area.
As the city expanded, with the ocean right at the doorstep, land to develop became scarce. The supply and demand for those highly disputed plots of land spiked prices up drastically.
And once you were able to acquire land, the taxes involved in living in the area and permits to build also affected the prices.
Although, to be fair, these taxes and permits are what keep the city organized and well administrated. That’s why, even to this day, it is a premium spot to live in.
When Will Housing Prices Drop in San Diego?
All the facts mentioned above continue to influence housing prices in San Diego.
High supply and demand, slow expansion and low inventory levels continue to make the market competitive. And all the studies point to the fact that they will continue to do so in 2022.
Prices are expected to remain stable at best, but there are no predictions for when they will drop.
Median housing prices in San Diego have increased 15% in a year-over-year basis, reaching a medium price of around $847,000.
Is it a Good Time to Buy?
Short answer: yes. Absolutely it is.
Since prices are not expected to drop, buying a house in San Diego right now is considered to be an extremely safe investment.
If you are already planning in buying, you might find it difficult, since it is a very directional buyer’s market right now. That means that are more buyers than sellers at the moment. But that should be read as a good thing, if you think long term wise.
That has been the case over the last years in San Diego, and since there are no predictions for when will it change, you are sure to maximize your investment, if ever plan to selling it back in a few years.
Even if you don’t think of it as an investment and simply dreams of living in the area, there is no time like the present to buy. There are no predictions for when the prices will drop, so the quicker you make your move, the better.
Predictions for the San Diego Housing Market
Mortgage Rates Going Up
Mortgage rates in the US have been low in recent years, but that’s about to change. The Mortgage Bankers Association forecasts that the rates will start to go up in 2022.
As of right now, the rate for 30-year fixed-rate loans is 3.19%. As for the 15-year fixed-rate loans, rates are 2.50%.
Predictions are that the rates reach 4% for 30-year fixed-rate loans and 2.3% for 15-year fixed-rate loans.
The increase in the 30-year fixed-rate loans balanced by the decrease in the 15-year fixed-rate loans is a sign of good economic forecast.
Influx of Tenants
With the end of the foreclosure moratorium, tenants might expect an increase in rent in 2022.
Rent in San Diego is already high, but those in areas where the rent is particularly higher might start looking for other options around August or September, which is usually when the rates go up.
There will be an increase in home buyers as well as vacancy spots left by those tenants, so we might see a sudden rush in the housing market then.
If you’re prepared, you can take advantage of it.
House inventories have been extremely low i San Diego for the better part of the last decade, but the last two years have been especially low.
During the COVID-19 pandemic, a series of protection acts have been put in place to help people maintain their homes during the difficult times.
Those acts are being slowly lifted in 2022, but at a slow rate, so house vacancy is not expected to reach a great volume.
Inventory level will continue to be low, and the market will continue to be disputed.
Acquiring a House in San Diego
When talking about the San Diego housing market, basically, there is no time like the present. Wait for prices to drop might leave you waiting for years, as there’s no end in sight for it.
But that’s a good thing from an investor point of view. It means it is a safe investment, and you will acquire a patrimony that will certainly increase in value over the years.
If that is something that sound interesting to you, why not get in contact with us here at The Real State Jedi team and talk more about it?
Our combined 12 years of experience can help you locate the best possible real estate deals around.
Give us a call or text us right now at (619) 431-4133. We would be happy to hear from you.