Southern California is experiencing a booming real estate market, and San Diego is head of the pack! San Diego home prices skyrocketed in the last year, with real estate being sold well above asking prices. Better yet, this momentum and fast property turnovers are expected to continue this fall.
With all the time people have spent at home over the course of this pandemic, the demand for homes in San Diego has increased exponentially. With the rate of mortgages being so low, homebuyers are flocking to San Diego, maintaining its seller’s market status this fall due to the limited available housing.
Feeling encouraged about the future real estate market and want to know more? Well, you’ve come to the right place! As an expert in property management in San Diego, North County Property Group has outlined exactly what to expect this autumn.
San Diego County Market Trends
With a whopping increase of 19.6% over the last year, the median home listing price in San Diego is $860,000. Even condominiums saw a sharp rise in median prices, with an 18.3% increase to $550,000. A jump to this extent is promising to anyone looking to sell their home or to buy an investment property.
Not only this, but homes stay on the market for an average of just 1.7 months, indicating a short supply of housing compared to buyers. 4 to 6 months is seen as a balanced market, generally. As you can tell, the vast difference between this time period and the current listing length of 1.7 months shows the full extent of the seller’s market here. The San Diego housing market is booming.
With all this in mind, San Diego’s housing market prices are unlikely to decline this fall. It’s a good time to buy, given that the 30-year fixed-rate this July was just 2.87% compared to 3.02% in July 2020. It’s best to take advantage of this low rate before it recovers to pre-pandemic rates.
There are some who are hesitant to venture into the San Diego housing market after the unpredictability of Covid-19. Like most parts of the world, San Diego took a hit at the height of the pandemic. Buyers stopped looking for homes and sellers pulled their own from the market in the midst of all the uncertainty.
Nevertheless, since July of 2020, it has become apparent that this downwards trend has pulled a complete 180. San Diego County broke records with a median home price of $634,000. With the exception of momentary natural dips in the market, it has been going on an upward trajectory ever since!
Fall Real Estate Market Forecast
Now, we’ve covered the increase of median home prices in San Diego, California over the last year, but what if we look further back? After all, seeing the bigger picture is best when considering an investment opportunity. In this case, investors are in luck. The average San Diego home value has appreciated by an incredible 118.75% since 2012!
San Diego’s home values have increased by 22.5% this year alone, and 82.7% in the last 10 years. San Diego is in the top 10% of the nation’s real estate appreciation, with an average annual rate of 6.22%.
With the limited housing supply, buyers must compete, speeding along sales and increasing prices. As mentioned, this is to a great benefit for those selling, and this fall is expected to have an even greater demand for housing units, boosting home prices even more according to displayed property listings. Appreciation is almost guaranteed, and the San Diego housing market is unlikely to become a buyer’s market, even well into the following year. For real estate investors, this home price growth due to demand is something to keep in mind when choosing when to buy.
San Diego Rental Market
While some investors may balk at San Diego’s housing prices, it’s still a relatively affordable option given the long-term benefits with the median rent here. In general, California has the reputation for pricey real estate. The national average price for home sales is around $300,000, after all.
However, when you compare it to California’s other prominent cities, you could buy multiple San Diego properties for the price of a single San Francisco home and still maintain a similar rate of return on your investment.
Additionally, San Diego is viable as a long-term investment. In a handful of decades, the city’s population is expected to grow to 4.5 million. And, as we all know, a growing population leads to a growing demand for housing. It's deemed reliable as a source of profit. By taking advantage of the low mortgage rates this fall, you’re likely to set yourself up for a major return on your investments in the future, especially with an increasing average rent price in Southern California.
The price of San Diego housing offers an additional benefit to investors. Many residents cannot afford to buy homes at the current median list price, leading to a thriving rental market. San Diego County has 46.7% of its residents rent their homes. The risk of vacancies for your property investment is highly reduced under these conditions.
Right now, the median rental price in San Diego is $2,700 for a two-bedroom unit. A family-friendly home could go for well over $3000 a month, or you could split a single home into multiple smaller units for around $2,200 each.
It’s also worth noting that rent has been increasing by around 4% each year. By venturing into San Diego’s real estate market this fall, you have a reliable growth on your investment ahead and a steady source of income.
San Diego’s real estate market is thriving, and the forecast for this fall is no different. With the current exceptionally low mortgage rates and a high appreciation in the future, it’s hard to go wrong with housing here.
If you’re looking to buy or sell property in San Diego, look no further than North County Property Group! We are a full-service Real Estate Broker and property management company. Our team has the experience and specialized services to help investors achieve their financial goals. We provide expert consultation, property searches, and market data to our clients.
Let us help you maximize the return on your investment! Give us a call today and we’d be happy to speak to you about our specialized services.