San Diego Real Estate Outlook – 2024
There has been a lot of speculation and discussion about the San Diego real estate market. Many people are wondering if we’re in the midst of a housing bubble that will eventually bust due to skyrocketing prices and a rise in demand. However, there are strong arguments against the impending collapse of San Diego’s real estate market. Let’s examine the seven main elements that support this optimistic perspective:
Market Thawing Gradually:
Existing home sales are anticipated to increase following a freeze in 2023 as mortgage rates decrease. The impact of constraints in supply on the housing market will eventually cause it to loosen. True price discovery will happen when mortgage rates decline and more houses are put up for sale. Prices might level off, but there won’t be a sharp decline in value.
The Capability of Builders to Lower Mortgage Rates:
Sales of recently constructed homes will keep their high market share. One benefit that builders have is that they can lower mortgage rates, which increases accessibility to homeownership. This ongoing demand will support the market’s stability.
The Intense Need for Housing:
A lot of people’s and families’ housing plans were thrown off by the pandemic. Pent-up demand will propel home sales when things get back to normal. Reentry into the market by buyers who put off their intentions will help maintain a steady flow of transactions.
Maintaining Rent Stabilization:
Due to the additional supply, rents should stabilize. Rent hikes are expected to closely follow inflation rates as additional rental units become available. This balance will stop the rental market from abruptly changing, which might have an effect on house prices.
The US economy’s resilience:
The American economy has proven to be resilient in the face of uncertainty. The robustness of the economy implies that any changes to the housing market will be gradual rather than sudden, even though inflation is still a worry. This resilience is encouraging for the San Diego real estate market.
Factors Beyond the Pandemic:
Other factors will influence the housing market in addition to pandemic-related changes. There will be an impact from an aging population, growing costs associated with climate change, geopolitical instability, and the development of artificial intelligence. These many factors will add to the ever-changing market environment.
Rates of Inflation and Mortgages:
One important component influencing mortgage rates is inflation. According to economists, inflation won’t regularly drop to 2.0% until 2026. As a result, during the next two years, short-term interest rates might continue to rise. Nonetheless, mortgage rates are probably going to decrease in step with the slowdown in inflation. A steady housing market will be supported by this slow decline.