Your Guide to the San Diego Real Estate Market for 2021

While there’s usually never a dull moment in the San Diego housing market, 2021 so far has been one for the books. With average home prices increasing and demand outpacing supply, it’s been nothing short of exciting. Despite the uptick in activity, there’s still some room for unpredictability as we close out the year. Fluctuations in housing figures are expected in the next few months due to demand and mortgage rates in Southern California. But for now, here’s what you need to know about the housing market in San Diego for 2021. 

According to the S&P CoreLogic Index, San Diego is one of the hottest markets in real estate right now with a 24.7 percent increase in home prices as of May 2021. The city is just behind Phoenix, which is currently leading the nation with a gain at 25.9 percent. This trend has continued strong in the past few months with prices of detached homes up 20.7% and attached homes up 17.8%. The median listing home price in San Diego was $789,000, and the median sold price was $785,000 in July 2021. On average, the sales-to-list price ratio was 103%, and homes in San Diego are sold after about ten days on the market. 

With remote jobs becoming the norm for many American workers and millennials looking to settle down, it’s no wonder that the supply of homes has become practically scarce. Most homes barely stay on the market for two weeks before being sold. Along with appreciating prices, this has understandably caused much fatigue and frustration among new and potential buyers. Unfortunately, it doesn’t look like the market is skewing in the buyer’s favor any time soon. Because of the decrease in active listings, this could mean that inventory will be tight for the coming months. This is true not just in San Diego but across Southern California as a whole. This is a seller’s market for sure, but it hasn’t slowed down demand one bit!

What’s also been enticing for buyers and is driving the surge in demand is the low mortgage rates. As of August 2021, a 30-year, fixed-rate mortgage is 3.06 percent compared to 3.23 percent last year. For now, the rates continue to be stable. However, they are predicted to increase in the next year, so this is one of the best times take advantage of the low rates as a buyer. The Mortgage Bankers Association (MBA) believes that mortgage interest rates nationally could be as high as 3.2 percent by the end of 2021 and could increase to a peak of 3.6 percent in 2022. While this might not seem like a lot, it all adds up once you sit down and tally up the dollars and cents. For any buyers out there: this is not necessarily bad news! What goes up must come down. The rise in interest rates could eventually be balanced out by sellers asking for less on the market. 

Whether you’re a seller, buyer, or investor, there’s no doubt that it’s been an interesting year in real estate for everyone. Because the market is flooded with buyers, sellers are able to sell at top dollar and with ease. But buyers shouldn’t lose all hope. Even though it’s a highly competitive market, you’re still looking at some of the best mortgage interest rates. If you’re planning on entering the market or are already in the midst of it, it might be best to prepare yourself and your finances to stay competitive with the higher prices. Going through the effort of buying property in San Diego will definitely be worth your while.