2019 Housing Search for San Diego County
Are we heading towards a solution? Are we in a bubble? Should I sell now? The answers are yes, no and maybe. 2018 – This last year was an overall solid year for the real estate market in San Diego, but the first half of the year couldn’t have looked and felt more different than the second half of the year. Through July, appreciation and overall sales were brisk, inventory was low, and the market was red hot.
As the year progressed, appreciation and increases in interest rates affected the affordability of the market for homebuyers. This, along with a substantial increase in the number of new listings, created a drag on the overall market. We predicted a 6% overall marketing appreciation at the start of the year, and San Diego County has appreciated right in line with our projections, which we were pleased to see, as were homeowners across the county. That being said, the year ended with a housing supply that is approximately 50% higher than the prior year, affordability at a 10-year low, a rising interest rate environment, and a fiscal, economic, and political climate that is , at best, uncertain. . Ultimately, 2019 is destined to be a year of transition.
Are we heading towards a solution? Are we in a bubble? Should I sell now? The answers are yes, no and maybe.
The fundamentals of San Diego’s economy are strong. Unemployment is low and we can’t build enough new homes to meet population growth and housing needs in today’s market. Affordability will continue to be an issue, but the market will hold firm throughout the year creating an ideal environment for buyers/sellers to go up or down.
The metrics imply that a buyer in 2019 will have more choice and less competition than previous years. Sellers will have longer market times to sell any home and the market will be more balanced between buyers and sellers overall. Although inventory is higher, San Diego is still a relatively supply-constrained market, so while we don’t project a recession in the market, we do expect the year to be mostly flat or slightly positive.
As a result, in 2019 we expect mild to moderate price appreciation for the foreseeable future in the short to medium term. We are in a market correction, but it may not be the type of correction that many consumers expect. If you expect more than a 15% correction in values, it’s not happening. As such, we are not in a bubble. The fundamentals are strong, and in any market that experiences a bubble, the fundamentals are thrown out the window. Should you sell? It depends on you. Where would you move to? It would be to your advantage to secure massive price gains in recent years in San Diego and move to or invest in other areas that have not fully appreciated and are poised to do so (think places like Utah, Colorado, North Carolina).
If you or someone you know is considering moving to or investing in San Diego real estate, we would love to serve you and would be delighted to get your recommendation. Here’s to a great year in 2019!