This "thing" happened in 2009 and could happen again in 2021 in San Diego.
The "thing" that happened is the "AFFORDABILITY GAP" widened. This is when home prices become too high relative to people's income. At that point, the buyer demand dries up, and home prices plateau or decline.
What's your home worth? Click here for a free home value!
Over the last several years, San Diego homes have appreciated 7-10% per year. For example, a $500,000 home 5 years ago could sell for $700,000 today.
At the same time salaries have gone up very little. Where are San Diego prices heading? Click here and find out.
The affordability gap has been minimized in the past few years because the interest rates have dropped while prices have gone up. But, mortgage interest rates are at 2.5%. How much lower could they go?
BOTTOM LINE
As prices continue to rise and buyer's income is flat, at what point do people stop buying because it's not affordable.
Call or text me at 619-846-1244.
George Lorimer |
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