Should I sell now or wait

[Jacob Laman]

Hi everyone,

I had a conversation with a lender agent today which started out discussing a refi but ended in looking to sell. I’m curious on a few more inputs from all of you. The question is do you guys think the housing market here in San Diego is going to make a correction this summer or fall? I am moving to Virginia in a year so no matter what I intend on selling I would just prefer not to turn upside down on my home.

Any input would be appreciated! Thanks everyone in advanced for your time.

[Dan H.]

Originally posted by @Twana Rasoul:

@Jacob Laman

The San Diego market is forecasted to appreciate over 8% each year for the next couple years. There’s no data to suggest that San Diego will see a “correction” other than mere opinion. Also, don’t refinance if you plan on selling in a year, waste of money.

Best of luck! :)

I do not know if prices will decline, but there is plenty of data that could lead to price decline.

San Diego home prices have risen since the start of Covid, but why?

• Decreased listings result in reduced supply.  This artificially altered the true supply/demand ratio  
• Very low interest rates that became lower to spur the economy to combat the economic impact of Covid  

Realize that both of those reasons are Covid related and have resulted in a current price in excess of what would have otherwise occurred.  

Data that can indicate a potential decrease in price:

• Unemployment rate of 8%.  
• Price is artificially high due to reduced supply a result of Covid (as well as lower interest rates).
• Lower listing count since the start of covid. This would indicate there is a likely back log of listings to increase supply.  This will swing the supply/demand ratio artificially to having more supply than would be normal.  
  
• STR rents are way down. They were banned by the state from late March to some point in June and again from before thanksgiving to the end of the year. The rest of the year, STR rents were impacted. This implies that most STRs had significantly less rent collected in 2020. Recent STR purchases relied on expected rent. Many lost a lot of money.
  
• Eviction moratoriums resulted in some landlords not collecting a lot of rent.  I expect most of the rent that has not been paid will never be collected.  This could result in LL losing a lot of money.   

There is plenty of indicators of a potential decline.  

I do not know where prices are going (no one does), but I see more risk of a coming price decline than I did a year ago.