San Diego Real Estate Market in 2019: WHAT TO EXPECT in the Next Year

2019 Home Search for San Diego County

Are we heading for a correction? Are we in a bubble? Should I sell now? The answers are yes, no and maybe. 2018: This past year was an overall solid year for the San Diego real estate market, 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 quick, 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 home buyers. This, coupled with a substantial increase in the number of new listings created a brake on the overall market. We forecast a 6% overall marketing appreciation at the beginning of the year, and San Diego County has appreciated in line with our projections, which was nice for us and for homeowners across the county. That said, the year ended with a housing supply that is roughly 50% higher than the previous year, affordability in a 10-year low, an environment of rising interest rates, and a fiscal, economic, and political climate that, at best, it is uncertain. . Ultimately, 2019 is set to be a year in transition.

Are we heading for a correction? Are we in a bubble? Should I sell now? The answers are yes, no and maybe.

The fundamentals of the San Diego economy are solid. Unemployment is low and we cannot build enough new homes to meet the growing population and housing needs in today’s market. Affordability will continue to be an issue, but the market will remain strong throughout the year creating an ideal environment to move up or down buyers / sellers.

The metrics imply that a buyer in 2019 will have more options and less competition than years before. Sellers will have longer time to market to sell a particular home, and the market will be more balanced between buyers and sellers overall. Although inventory is higher, San Diego is still a relatively limited supply market, so while we do not project a recession in the market, we expect the year to be largely flat to slightly positive.

As a result, in 2019 we expect a slight to moderate price appreciation for the foreseeable future in the short and medium term. We are in a market correction, but it may not be the type of correction that many consumers expect. If you expect a 15% + correction in the values, it is not happening. As such, we are not in a bubble. Fundamentals are solid, and in any market that experiences a bubble, fundamentals are thrown out the window. Should you sell? It depends on you. Where would you move to? It would be advantageous to secure massive price gains over the last few years in San Diego and move or invest in other areas that haven’t fully appreciated and are ready (think places like Utah, Colorado, North Carolina)

If you or someone you know is considering moving or investing in real estate in San Diego, we would love to serve you and be happy to get your recommendation. For a great year in 2019!

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