San Diego Housing Market Update
San Diego is known for sunshine, beautiful beaches, surfing, a thriving food scene, and sky-high real estate prices. After two years of low-interest rates and manic home buying fueled by a pandemic and lifestyle shifts, the housing bull run may be over. U.S. home prices are falling for the first time in a decade. Let’s explore the changing markets with a San Diego housing update.
San Diego Housing Update
After the housing crash that began in 2008 ended in 2012, U.S. real estate experienced ten years of price gains, finished off with a two-year pandemic buying spree.
In 2022, as inflation soars, the Federal Reserve is fighting to curb inflation. What does this mean for buyers? Rates are going up, nearly doubling what they were last year and edging closer to 7%.
This rise in rates is causing demand for homes to dwindle and home prices to trend downward. Some of the biggest home price declines could be seen in San Diego.
Is The San Diego Housing Market Cooling Off?
According to Redfin, the 10 fastest-cooling markets include Seattle, Las Vegas, and the three California cities of San Jose, San Diego, and Sacramento.
The housing market in San Diego is cooling off. However, that doesn’t mean it’s suddenly affordable. Prices are still high. However, they are trending down. The median price of a home in San Diego is $850,000. However, home prices fell 2.5% in the past three months, even though they are up over 10% yearly (YoY).
Homes in San Diego are also sitting on the market longer than before, 22 days on the market compared to 12 days last year. The numbers of homes sold are also down, with 1,023 homes sold in August this year, versus 1,538 last year.
The reasons for the cooldown aren’t surprising. The interest rates have nearly doubled this year, giving many buyers pause. With rising rates, the mortgage cost is nearing 20-30% more than last year. To put this in perspective, a mortgage on an $800,000 home would be over $5,000 per month. Last year, that same mortgage would be less than $4,000 monthly.
The Fed is projected to raise mortgage rates by 1.25 percentage points by the end of this year.
Prices Are Dropping
According to the San Diego Association of Realtors, the median price of a single-family home dropped by 5% last month to $910,000.
As many buyers press pause on their home buying plans, those who stay in the market may benefit. Fewer buyers mean less chance of a bidding war and more options to ask the seller to contribute to closing costs.
Why Vets Live In San Diego
For many people, moving to San Diego is one of the best decisions they've ever made. The city has an amazing climate and beautiful scenery, with a bustling downtown district and miles of gorgeous beaches.
San Diego is also home to a large military presence. Since World War II, the city's deep-water port has been integral in moving troops, equipment, and materials. The U.S. Navy chose San Diego for its headquarters in 1951, and both the Navy and Marine Corps have since built up a large presence here.
Camp Pendleton is home to 33,000 active-duty Marines who train there every year; it's also one of the largest military training bases in the world, with more than 140 miles of shoreline that provide plenty of space for amphibious warfare training exercises.
The Naval Base San Diego features two major shipyards (one on North Island) where aircraft carriers are repaired as well as numerous other facilities providing support services such as law enforcement or food services; these are staffed by around 20,000 civilian employees along with active duty personnel who work on a base full time or part-time depending on their job requirements.
Finally, there’s Marine Corps Recruit Depot Parris Island, where fresh recruits go through boot camp before being sent off into their respective battalions once they complete their training program!
Interested in moving to San Diego? Learn how to apply for a VA loan online with Military Homespot Lending. Click here for the details.