No two terms a realtor wants to hear – higher interest rates and Increased inventory – but that is the picture right now. Is it cause for panic – nope. It is just the reality of our changing market. As I mentioned in my May newsletter, the past two years have been extraordinary in the real estate market. If you have been a seller or buyer you know what it was like.
Well that was then and this is now.
Our market is leveling out. Buyers don’t have to give away everything to get a good property. Sellers will still make more than they would have a year ago but things are looking more balanced. Unfortunately, some buyers are backing away from the market. Sales were down 18 percent countywide in July over the previous month. According to a Redfin study released on Tuesday, 16 percent of all buyers backed out of deals (up from 12.5 percent a year earlier.) The median sales price this week county-wide is $805,000. In May it was $850,000.
You get the picture. So where do we go from here? Economists don’t agree on if prices will continue to drop. Zillow is actually predicting prices will increase by 7.1 percent over the next 12 months because we still have a housing shortage in San Diego. We all have heard how high rents are. If you have money for a down payment it may actually be cheaper to buy then rent. I don’t have a crystal ball but if I were a buyer and found the right property I would buy knowing that whatever correction is ahead it is impossible to time the market and real estate is historically the best way to build wealth.