How will tariffs affect the San Diego housing market
Tariffs and Their Impact on the Housing Market
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The San Diego housing market is experiencing a dynamic shift, presenting opportunities and challenges for prospective buyers and sellers. Recent global tariffs have introduced complexities influencing home prices, supply and demand dynamics, new construction, and mortgage rates.?MarketWatch
Impact on Home Prices and Supply - This long-term consequence may help the resale home market.
Implementing tariffs has increased costs for building materials such as lumber, gypsum for drywall, and home appliances. These rising expenses have, in some cases, added thousands of dollars to the cost of new home construction. Despite these challenges, San Diego has seen a surge in housing inventory, with a 28.5% year-over-year increase in active listings as of March. This increase in supply is providing buyers with more options and has contributed to stabilizing home prices.MBA Newslink Mortgage Professional News
New Construction Trends - These are mostly, like 90% bigger apartments for rent and multi-unit buildings, not traditional homes being sold.
Builders in San Diego are responding to market demands by increasing the supply of newly built homes, focusing on creating smaller, more affordable options. This effort aims to address the longstanding issue of housing undersupply and provide more accessible choices for buyers. Over 4,000 new housing units are currently under construction across the county, including houses, townhomes, and mid-to-high-rise apartment buildings. ?Compass San Diego Housing Market
Mortgage Rates and Buyer Affordability—We saw an immediate spike in buyer activity. It is a good time to buy and sell right now.
Amid the ongoing trade tensions and market volatility, a notable dip in mortgage rates has offered temporary relief for homebuyers. As of early April, the 30-year fixed mortgage rate fell to around 6.55%, the lowest since October 2024. However, analysts caution that this decline may be short-lived, as potential inflationary pressures from disrupted supply chains could lead to future rate increases. Business Insider
Short-Term vs. Long-Term Outlook
In the short term, buyers may benefit from increased housing inventory and temporarily lower mortgage rates, making it an opportune time to enter the market. On the other hand, sellers may need to adjust expectations and consider strategic pricing to attract buyers in this evolving landscape. In the long term, the full impact of tariffs on the housing market remains uncertain. While efforts to boost domestic production of building materials are underway, potential supply chain constraints and rising costs could influence future market conditions. Mortgage Professional
Conclusion—There are opportunities to buy and sell in this market, and to do it right. Let's use my experience to help you win in this market. Call or text me today at 619-846-1244, George Lorimer.
Navigating the current San Diego housing market requires a balanced approach. The present conditions offer buyers a window of opportunity with more choices and favorable mortgage rates. Sellers can still find success by staying informed and adaptable to market trends. Engaging with knowledgeable real estate professionals will be key to making informed decisions in this dynamic environment.