San Diego home prices are increasing at a staggering rate, where double-digit increases are not uncommon.
The San Diego Association of Realtors (SDAR) compared detached homes sold in the first quarter of 2013 against detached sold for the same period of 2012. The top 10 Zip Codes with the highest increase in median dollar per square foot exceeded 25% price gain. Solana beach and East San Diego experienced more than 35% price gain. Very active marketplace, let’s look at all 10 zip codes.
What do we make out of these numbers? Housing Inventory is 40% down from a year ago, home prices are at least 20% higher from last year, and 30-year fixed rates are in the 3% range. This confirms that San Diego is in a seller’s market.
San Diego home prices can’t keep increasing at the same rate. In order to sustain double digits growth salaries will need to increase. Also, interest rates will eventually increase, a jump from 3% to 5% will definitely affect affordability.
As of today, many listings are getting multiple offers, and many of them are cash offers. On the other hand, buyers, are having a tuff time getting their offers accepted and they have to make concessions.
It is a very dynamic San Diego market, and we are looking forward to what is next for the rest of the year.