May 18, 2020 San Diego real estate update

With # of home sales down, what about prices? 

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We are seeing a shift in the number of sales with the quarantine is down approximately 30%, prices are nearly the same, and the inventory is building. Also, the mortgage rates are down in the 3% range.
What will the future be?

Click here to see San Diego market stats

Will prices go up or down?

There are 2 schools of thought. Interestingly, they are influenced by people's circumstances.

1. Prices will go down (echoed by renters and potential home buyers).
2. Prices will stay the same or go up (echoed by the homeowners).

Neither of these is right, or both are right, or somewhere in the middle. It depends on the neighborhood, the type of home, and the demand for those homes.

I am optimistic that the market will be stable because of the following facts.

1. There is a lot of equity in homes. Over the last 10 years, prices have gone up 50%.
2. This global pandemic is not a housing crisis.
3. There is a shortage of houses for sale. Right now, there is less than a 2-month supply of inventory.
4. I don't know of an effective way to "Time the Market" particularly if it is your home to live-in. We all need somewhere to live and there are tax incentives for homeownership

Then you create a wealth effect by it going up in value, you pay down the loan balance every month, and before you know it you have tens of thousands of dollars in equity.

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