Quote from @Steve Meyers:
Hi All,
I've been getting a lot of questions regarding the San Diego market in particular and where prices are going etc so I wanted to pull the most recent data to compare last year's January to this one.
All properties saw an increase of 9.5% in prices from January 22 to January 23 which is displayed on the graph below.
I also pulled inventory numbers by price point in the second graph below. The average home price in San Diego is about $840K which currently has about a .9 month supply up .3 from last year.
I'm going to be watching this month over month to see where inventory numbers go but I wanted to post about this because there have been a lot of media companies (Goldman Sachs) out there that put San Diego in their headlines as one of the markets to take a hit in prices, but I don't see it happening anytime soon unless we really see an increase in our inventory supply. A lot of these media companies are just putting headlines out there for click bait and not actually looking at the data.
Demand for San Diego housing has and will continue to be one of the most desirable and competitive markets in the US.
@Dan H. @Steve Meyers
I have read the Goldman articles in their entirety, as well as the USC and UCSD school of real estate articles projecting a major decrease in San Diego home values in 2023. The common thread about these articles actually has nothing to do with Supply/Demand; they don't cite the 2008 numbers and they don't make a claim toward the basic tenants of S&D that you would anticipate from any market-related projection.
What all 3 articles have in common is that they are using a "new way" of projecting market activity - they are looking at buyer activity across 3rd party applications online as a foreshadowing of future buyer demand...and it kind of makes sense to me. After all, buyers leave a HUGE digital footprint when looking to purchase a home: mortgage sopping, saved searched on Redfin, Zillow, Homesnap, etc., researching moving companies, UHauls, designers, and General Contractors.
So, I don't think we can throw the baby out with the bath water...if this data is way down, then buyer activity is likely to be a bit less this year.
However, buyer activity is 50% of the market's behavior, at best. The articles don't take into account inventory numbers, current seller positions (interest rates in the 3's and 4's) and motivation, buyer trends toward different asset classes, etc.
At best, it is interesting to see the data and start to apply it how we see fit...which would have to apply *projected* buyer behavior, like these articles are, against *projected* seller behavior...which these articles are not, IMO. The articles ar applying projected buyer behavior against the past 5-10 year average of seller data.
My $.02 - sellers aren't nearly as motivated as they have been in the last 12 years and prices will stay extremely strong in San Diego; buyer activity may even drop, as predicted by these articles, but it won't have a 20% dip in values and we may even see values continue to climb in 2023. My guess is that values trade sideways in 2023 and then continue to go up just as interest rates come down in 2024 (ELECTION YEAR - they always do)...so this year should present some good buying opportunity windows.
Hope that is helpful!
