As we’re wrapping up the spring home selling season and heading into summer, we’re seeing a lot of hustle and bustle, with a small number of transactions. Prices are increasing, yet there just aren’t that many homes for sale, or that many sales happening relative to past years. In this video, we’ll delve into the latest numbers and trends in the San Diego real estate market, discussing the low inventory, rising prices, and the impact of fluctuating interest rates.

Month Over Month Trends

New listings were up almost 20 percent, pending sales increased by 5.3 percent, and closed sales saw a significant jump of 14.6 percent. Additionally, there was a notable increase in the number of homes for sale, while the median price rose by 1.5 percent. Despite a slight year-over-year decrease, the median price has been steadily ticking up over the past three months, reflecting a strong pool of buyers competing for a limited inventory.

Year Over Year Trends

Zooming out to examine the yearly trends, we observe a significant decline in new listings. Compared to previous years, 2023 has seen approximately half the volume of listings. This low volume applies to both detached and attached properties.

Closed sales have been impacted by the limited inventory, with a 32 percent decline this year compared to the previous year. This situation is not ideal for the economy. However, given the circumstances, the San Diego real estate market has shown resilience, with the median sale price remaining relatively stable, only 2.6 percent lower than the previous year. This modest decrease is remarkable considering the sharp fall in median prices experienced last summer due to a spike in interest rates.

The Influence of Interest Rates

Interest rates are a driving force in the current market dynamics. Fluctuating interest rates have pushed many buyers to the sidelines. Homeowners are holding onto their properties because they secured low rates in previous years and are hesitant to trade them for today’s higher rates. The industry experts predict that rates will eventually come down, offering hope for increased market activity.

Conclusion

Despite the challenges posed by low inventory and fluctuating interest rates, the San Diego real estate market continues to experience buyer demand and competitive offers. Properties are selling quickly, often attracting multiple offers and even selling above asking price. This high demand, coupled with limited supply, has driven prices upward. The market has defied historical trends, creating an unpredictable environment for buyers and sellers. Looking ahead, the direction of the San Diego real estate market remains uncertain. The hope is that interest rates will stabilize or decrease, stimulating more activity in the market. Lower rates can encourage buyers to reenter the market and provide a boost to inventory. As we navigate these strange times, we’ll continue to monitor the market closely and provide you with regular updates. Stay tuned for next month’s update, and enjoy the summer season!